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In order to meet some of the requirements under this Act, the Commission's transcripts will therefore be bilingual as to their covers, the listing of CRTC members and staff attending the hearings, and the table of contents.
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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
March 29, 2007 Le 29 mars 2007
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
VARIOUS BROADCASTING APPLICATIONS /
PLUSIEURS DEMANDES EN RADIODIFFUSION
BEFORE / DEVANT:
Rita Cugini Chairperson / Présidente
Michel Arpin Commissioner / Conseiller
Richard French Commissioner / Conseiller
Barbara Cram Commissioner / Conseillère
Helen del Val Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Jade Roy Secretary / Secrétaire
Valérie Dionne Legal Counsel /
Joe Aguiar Hearing Manager /
Gérant de l'audience
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
Portage IV Portage IV
140 Promenade du Portage 140, promenade du Portage
Gatineau, Quebec Gatineau (Québec)
March 29, 2007 Le 29 mars 2007
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Larche Communications Inc. 783 / 4951
Haliburton Broadcasting Group (OBCI) 842 / 5332
INTERVENTION BY / INTERVENTION PAR:
Music and Film in Motion 910 / 5751
Connelly Communications Inc. 921 / 5817
William Wrightsell 923 / 5830
Joco Communications Inc. 925 / 5839
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
PRESENTATION BY / PRÉSENTATION PAR:
Canadian Documentary Channel Limited Partnership 927 / 5854
INTERVENTION BY / INTERVENTION PAR:
CFTPA 968 / 6108
Documentary Organisation of Canada 991 / 6234
AFFIRMED: MR. DAVID J. MANCY 1032 / 6460
PRESENTATION BY / PRÉSENTATION PAR:
CJRN 710 Inc. 1032 / 6463
Gatineau Quebec / Gatineau (Québec)
‑‑‑ Upon resuming on Thursday, March 29, 2007
at 0900 / L'audience reprend le vendredi
29 mars 2007 à 0900
LISTNUM 1 \l 1 \s 49454945 THE CHAIRPERSON: Order, please.
LISTNUM 1 \l 14946 Madam Secretary.
LISTNUM 1 \l 14947 THE SECRETARY: For the record, Newcap has filed their market study. This document is available in the examination room.
LISTNUM 1 \l 14948 We will now proceed with Item 17 on the Agenda which is an application by Larche Communications Inc. for a licence to operate an English‑language FM commercial radio programming undertaking in Sudbury.
LISTNUM 1 \l 14949 The new station would operate on frequency 91.7 MHz, Channel 219B, with an effective radiated power of 50,000 watts, non‑directional antenna/antenna height of 120.9 metres.
LISTNUM 1 \l 14950 Appearing for the applicant is Mr. Paul Larche, who will introduce his colleagues. You will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 14951 MR. LARCHE: Thank you.
LISTNUM 1 \l 14952 Good morning, Madam Chair and Commissioners. My name is Paul Larche. I am the President of Larche Communications Inc., or LCI for short. It is a privilege, as always, to be in front of you today applying for a new FM radio service for Sudbury.
LISTNUM 1 \l 14953 I would like to introduce my panel. Unfortunately, Mora Austin, who is our company's Vice President, could not join us this morning as her son is having surgery, so I have asked our Midland Station Manager's General Sales Manager, Linda Young, to do a little pinch‑hitting for Mora this morning. Linda has worked at CICZ for over 10 years and she is to my far left, your far right.
LISTNUM 1 \l 14954 Next to Linda ‑‑ actually, next to me, is our company's Music and Program Director, along with Morning Show Host of CICZ‑FM Ted Roop. Ted recently won the Canadian Country Music Association's On‑Air Personality of the Year Award for 2006.
LISTNUM 1 \l 14955 Seated next to Ted is our Promotions Director for CIKZ‑FM Kitchener, Beth Warren. Prior to joining us just over three years ago, Beth worked for more than 10 years in the Canadian Independent Country Music industry. She won Manager of the Year award in both 1999 and 2000 at the Ontario Country Music Awards and Record Company Person of the Year at the CCMA awards in 1999.
LISTNUM 1 \l 14956 Madam Chair and Commissioners, I can't tell you how excited I am to be here today. Sudbury really does hold a very special place in my heart and life. In 1986, I was transferred out of Timmins, my home town, to Sudbury in the capacity of General Manager of CKSO and CIGM‑FM, two stations Telemedia had just purchased from the Plant family.
LISTNUM 1 \l 14957 When you grow up in Timmins, moving to Sudbury is a big deal. Sudbury was, and still is, the largest city in Northern Ontario. I was only 26 years old, but what I lacked inexperience I hope I made up in enthusiasm.
LISTNUM 1 \l 14958 The two stations needed a lot of work and, with the help of a great group of people, many of whom still work there, we turned these stations around from money losers to a profitable business.
LISTNUM 1 \l 14959 I made many friends in Sudbury that I'm still very close to today. My second daughter, Jessica, was born at Sudbury General. She is 19. Whew, time flies.
LISTNUM 1 \l 14960 Sudbury is where I was first exposed to the Salvation Army. I sat on their Board and marvelled at the great things they unselfishly do for the communities they serve. They taught me so much about giving back.
LISTNUM 1 \l 14961 I spent four years in Sudbury. It was, and still is, a great city that sometimes gets an unfair rap.
LISTNUM 1 \l 14962 I also hoped I could do business there again. Northern Ontario is a great place to grow up and do business. I understand its culture and needs. J'apprécie et comprends la culture du nord Ontario ‑ de le point de vue anglais et franco‑ontarian.
LISTNUM 1 \l 14963 We are very proud of the application before you today. We believe it strikes the perfect balance of reflecting and satisfying market needs, sound business judgment, and fulfilling the mandate of the Broadcast Act.
LISTNUM 1 \l 14964 So let's start with our business plan.
LISTNUM 1 \l 14965 Ted...?
LISTNUM 1 \l 14966 MR. ROOP: Thank you very much, Paul.
LISTNUM 1 \l 14967 Good morning, Commissioners.
LISTNUM 1 \l 14968 We are applying for a country music station in Sudbury. I want to make it clear that this decision was not based on the fact that we are known for country radio, but because that is what the market wants. We commissioned research to determine the viability of the top three radio formats currently missing on the FM band in Sudbury: Country, CHR and Alternative Rock.
LISTNUM 1 \l 14969 The format with the best potential for success was clearly Country. This stands to reason, as Sudbury is one of the few communities of its size in Ontario that does not have a country FM. Country radio is Canada's third most listen to format, and forth in Ontario.
LISTNUM 1 \l 14970 As you know there is an AM station owned by Rogers in Sudbury that does air some country music. This station, however, is not for filling the needs of the market, particularly with listeners under the age of 50, where CIGM only garners a 3 percent share of hours tuned.
LISTNUM 1 \l 14971 This is an unfortunate reality of music on AM radio today and is why several are finding alternative formats such as sports and talk. Country listeners in Sudbury have abandoned radio for iPods and internet to get their country fix.
LISTNUM 1 \l 14972 The new station were applying for will be called KICX 91.7, Sudbury's Hot New Country, branded in the same way as our Midland station, CICZ, which we call KICX 104, and CIKZ which we call KICX 106.
LISTNUM 1 \l 14973 But KICX 91.7 won't be a rebroadcaster or of our existing station. All of the programming will be local. KICX 91.7 will feature the best in country music from the late '80s, '90s and today. Core artists will include Shania Twain, the Dixie chicks, Paul Brandt, Alan Jackson and Terri Clark.
LISTNUM 1 \l 14974 Approximately 50 percent of our selection will be current. However, heritage country artists, like Patsy Cline and Anne Murray, will also find a home of our station. We will place a special emphasis on Canadian country music. That's why we have proposed as a condition of licence a minimum of 40 percent Canadian content.
LISTNUM 1 \l 14975 We are also very proud of our track record to developing and exposing new country emerging artists. Beyond our substantial CCD commitments, we have committed to airing vignettes that highlight emerging Canadian artists that we have added to our playlist.
LISTNUM 1 \l 14976 We are prepared to accept as a condition of licence a quota on Canadian emerging artists, although we do believe the CRTC must clearly articulate how it will define an emerging artist and the regulatory mechanism it will use to measure it. We support the CAB's intervention for this hearing regarding these matters.
LISTNUM 1 \l 14977 I am very proud of the track record KICX 104 in Midland has established. The Canadian Country Music Association has chosen us as Country Station of the Year for four out of the past five years. We would like to duplicate this success in Sudbury.
LISTNUM 1 \l 14978 Of course, music is only one component of a successful station. Our non‑music programming, in a nutshell, will be local, local and more local. That is what has made us successful in Central Ontario, that is what is making must successful in Kitchener, and that is what will make us successful in Sudbury.
LISTNUM 1 \l 14979 In today's age of iPods, Satellite Radio and other emerging technologies, terrestrial radio's true edge is being local: Informing, reflecting and discussing local and regional content.
LISTNUM 1 \l 14980 We have committed to over 12 and a half hours of meaningful local spoken‑word programming. For example, we will program is six times per day special community vignettes called "Community Clips". They will feature a wide range of local topics and interviews aimed to reflect the needs of Sudbury and cultural diversity of the region.
LISTNUM 1 \l 14981 With over 300 lakes in the greater Sudbury Watershed, we will offer comprehensive daily recreation and tourism reports throughout the year focused on boating, fishing, camping, skiing, snowmobiling and more.
LISTNUM 1 \l 14982 You will find our community cruiser at many community events such as the Northern Lights Festival, offering both on‑site and on‑air exposure.
LISTNUM 1 \l 14983 In addition, the station will invite various community groups and charitable organizations to post their information, special events and links on our website.
LISTNUM 1 \l 14984 KICX 91.7 will also offer a new and diverse news voice to the Sudbury market. We will provide a comprehensive news service, broadcasting over four hours of news and information per week. The news will be supplemented by local sports, local weather and local traffic reports throughout the broadcast day.
LISTNUM 1 \l 14985 And, as an added benefit, we will cross‑promote news, public events and tourist attractions between our Midland and Kitchener operations.
LISTNUM 1 \l 14986 Now to talk to you a little bit more about our company, here's Linda.
LISTNUM 1 \l 14987 MS YOUNG: Thanks, Ted.
LISTNUM 1 \l 14988 Madam Chair and Commissioners, I have worked at CICZ‑FM for over 10 years. Prior to Paul's purchase, I can honestly tell you it was in bad shape. We only had a staff of six people. We were losing money, revenues, let alone morale.
LISTNUM 1 \l 14989 It's hard to believe that Paul bought the station 10 years ago. I guess time really does fly when you are having fun. And what a great ride it has been.
LISTNUM 1 \l 14990 Under Paul's leadership CICZ‑FM has been a great broadcast success story. We are very proud to say were doing the same in Kitchener.
LISTNUM 1 \l 14991 Our Mission Statement is exceedingly simple: MOCHA. This stands for Make Our Customers Happy Always. Our customers are the people of communities we serve, including our listeners, our advertisers, and our employees.
LISTNUM 1 \l 14992 In fact, it is mandatory at LCI that all management volunteer for a service group or charitable organization within our market. The core values behind MOCHA are really quite simple: Make sure we have the right strategy, the right people, effective systems and quality in everything we do.
LISTNUM 1 \l 14993 Our vision is to be the most successful small, independent broadcaster in Canada. We want to be envied as a leader in community service, ratings, profitability, innovation and also a place to work.
LISTNUM 1 \l 14994 It really comes down to this: Ask our customers what they want and give it to them. What a concept!
LISTNUM 1 \l 14995 Despite the size of our company, Paul has set high standards that bring out the best in all of us. His staff and peers respect and admire him. He believes in rewarding people, both promotionally and financially, and our profit‑sharing programs exhibit his generous character.
LISTNUM 1 \l 14996 I speak on behalf of the entire staff, when I say Paul has taught us all so much, so much about running a profitable business; so much about managing and coaching; and so much about the importance of serving our communities with the same dedication and passion that we all have for this great business, radio.
LISTNUM 1 \l 14997 We want our company to grow. Paul wants to give his employees an opportunity to grow as well. That is why we are here today. We have shown ourselves and we have shown the industry that despite being a small independent we can compete with the very best in the country.
LISTNUM 1 \l 14998 I would now like to pass it over to Beth.
LISTNUM 1 \l 14999 MS WARREN: Thanks, Linda.
LISTNUM 1 \l 15000 I have worked in the music business in a number of capacities for more than 20 years. This is my first occasion to present in front of the CRTC, and I would like to take this opportunity to tell you first‑hand that the dollars committed by radio really do make a difference. I have worked with several artists that have gone on to have successful careers and they couldn't have done it without the help and the financial support of radio.
LISTNUM 1 \l 15001 LCI is committing a total of $350,000 over the first licence term. We believe our initiatives will make a real difference, particularly with emerging artists.
LISTNUM 1 \l 15002 $20,000 per year will go to FACTOR. It goes without saying the great job they do at developing new talent and assisting Canadian talent in general.
LISTNUM 1 \l 15003 Another $10,000 per year will go to the CCMA's Country Talent Development Fund. These funds provide emerging Canadian artists great showcase opportunities, including Canadian Country Music Week each September.
LISTNUM 1 \l 15004 We have committed $10,000 per year to send Sudbury and area emerging artists to Canadian Music Week. These participants will attend special artist/creator development courses, seminars, workshops and mentoring sessions that will help provide new artists, writers and musicians with the knowledge and tools they need to succeed.
LISTNUM 1 \l 15005 KICX 91.7 will also host the StarQuest talent search at the cost of $10,000 per year. This will be modeled on the successful StarQuest's we conduct in Midland and Kitchener. The winner will receive studio time, reproduction and, of course, airtime on all of our stations.
LISTNUM 1 \l 15006 Our application also outlines a commitment of $50,000 per year in airtime devoted to promotion of music‑related activities in Sudbury and area as it relates to emerging artists. This would include the promotion of concerts and performances by local artists; artistic programs in the community; and the release of CDs for local artists. These are truly outstanding CCD initiatives, that we believe exceed and surpass the Commission's CCD plan as outlined in the recent Radio Review.
LISTNUM 1 \l 15007 LCI is committed to Canadian country music ‑‑ it's our lifeline ‑‑ and we know we need a steady supply of high quality talent for our listeners. We always strive to present Canadian emerging artists any time we are able to, often opening for a popular headliner so that we can have a built‑in audience.
LISTNUM 1 \l 15008 LCI has presented many country music concerts in both Central Ontario and Kitchener‑Waterloo. These shows are done at our expense and our risk.
LISTNUM 1 \l 15009 And we often present concerts at no cost to the audience. For example, Paul challenged me a few years ago to present five Canadian artists in on night for more than 2,000 people. It sounds simple enough, however all five artists were playing in three different venues in three different cities. It was a bit of a challenge logistically, however, we exposed as many of our listeners as possible to as much Canadian country talent as possible in just one night. The audience, our listeners, were absolutely thrilled. Three years later I still have people telling me what a great time they had.
LISTNUM 1 \l 15010 The artists? Not only did they also have a great time, but they sold more CDs in that one night than they have at most gigs and, as a result, they now have a tonne of loyal fans.
LISTNUM 1 \l 15011 In my career, I have worked on the artist side with many radio stations from across the country. I know it sounds a little bit like job security, but I can honestly tell you that I have never seen a company that puts so much time, effort, money and heart into promoting and exposing Canadian talent. We hope to have the chance to do this in Sudbury.
LISTNUM 1 \l 15012 Paul...?
LISTNUM 1 \l 15013 MR. LARCHE: Thanks, Beth.
LISTNUM 1 \l 15014 In this time of consolidation, radio station ownership is changing very quickly. Independent broadcasters are becoming rare, which is a shame because I believe we play a vital role in Canada's broadcast system. Beyond offering an alternative voice, we create many of the jobs in our industry, particularly for people starting out, and often consolidation results in staff reductions.
LISTNUM 1 \l 15015 But equally important is that our industry functions at its best with many stakeholders, not just the voice or position of five big companies with various competing interests. That's why I'm so active with the Canadian Association of Broadcasters and I chair several committees, including the Independent Radio Caucus Committee, to ensure the smaller players have a voice.
LISTNUM 1 \l 15016 The larger companies, with their considerable financial and human resources, can make it difficult for an independent to survive if they want, especially if they decide to go head‑to‑head in a competitive market. Some can afford to lose money for years. An independent broadcasters cannot.
LISTNUM 1 \l 15017 LCI is being proactive with this application. We are positioning ourselves for the long term. Economies will be realized for us in areas such as programming, management and accounting, and since all three stations will have the same format, several promotions could involve all entities.
LISTNUM 1 \l 15018 I mentioned earlier my exposure to the Salvation Army in Sudbury in 1986. This is an organization I'm still very much involved with today. This past Christmas, our two stations collectively raised over $50,000 for needy families in our communities with the Salvation Army: making a difference in the communities we serve. At our Christmas party we talked about it. There wasn't a dry eye in the house, because we all consider this a privilege.
LISTNUM 1 \l 15019 We are custodians of broadcast licences that belong to the Canadian people. The Broadcast Act wisely lets us hold on to it if we give back and reflect our country and our communities. What a deal.
LISTNUM 1 \l 15020 You have had several great applications in front of you yesterday and TV today by some great broadcasters. I don't envy your position.
LISTNUM 1 \l 15021 But, in conclusion, I hope you will agree this application exceeds and surpasses the Commission's criteria for licensing a new radio station. I trust you will agree that it a fair, realistic application based on what we have already proven we will do, not just on what you want to hear.
LISTNUM 1 \l 15022 Approval of this application will fill the largest under served format in the market, country, by a young group of broadcasters who are considered by their peers, as the best in Canada when it comes to this format. We will bring listeners back to radio.
LISTNUM 1 \l 15023 Approval of this application will introduce a new editorial voice in the city, one that will offer extensive news and community programming, as well as a number of additional community initiatives that will expand and reflect the make‑up and culture of the great city of Sudbury.
LISTNUM 1 \l 15024 Approval of this application will result in a 40 percent Canadian content and a comprehensive series of expenditures on Canadian talent totalling over $350,000 over the licence term.
LISTNUM 1 \l 15025 Finally, approval of this application will allow a small, independent radio company to get stronger, stronger to hold its own against much larger public companies, stronger to weather economic downturns, and stronger to contribute and enhanced, the goals and aspirations of the Canadian Broadcast Act.
LISTNUM 1 \l 15026 Thank you very much. We appreciate your time and we are ready for your questions
LISTNUM 1 \l 15027 THE CHAIRPERSON: Thank you, Mr. Larche, and your colleagues.
LISTNUM 1 \l 15028 Commissioner del Val...?
LISTNUM 1 \l 15029 COMMISSIONER del VAL: Thank you, Madam Chair.
LISTNUM 1 \l 15030 Thank you for your presentation, Mr. Larche and your team.
LISTNUM 1 \l 15031 We will start with the easy stuff first. Let's just go to the format that you have chosen.
LISTNUM 1 \l 15032 The age range, the demographic that you have identified, 35 to 64, is quite a wide range. Can you identify within that range what is the sort of the core target group?
LISTNUM 1 \l 15033 MR. LARCHE: Thirty‑nine year old female.
LISTNUM 1 \l 15034 COMMISSIONER del VAL: That is quite a narrow ‑‑ all right.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15035 MR. LARCHE: Is that narrow enough for you?
LISTNUM 1 \l 15036 COMMISSIONER del VAL: You can widen it a bit more than just one year.
LISTNUM 1 \l 15037 MR. LARCHE: We have a fictional couple called Jack and Diane. Diane is 39 and Jack is 41 and we know who they are, what is important in their lives, where they work, where their kids go to school, the types of things that mean a lot to them in terms of values in their life.
LISTNUM 1 \l 15038 Country music is a very roots‑based‑type format with strong values. So we have a very, very, very clear definition of who our target customer is and all of our on‑air staff and, frankly, our entire staff, know Jack and Diane very well.
LISTNUM 1 \l 15039 I can tell you where they live in Midland and in Kitchener if you want.
LISTNUM 1 \l 15040 COMMISSIONER del VAL: So are those the same target groups in your Midland and the Kitchener stations?
LISTNUM 1 \l 15041 MR. LARCHE: That is correct.
LISTNUM 1 \l 15042 COMMISSIONER del VAL: I know you have also named and identified the country music from the late '80s, '90s. and then 50 percent is from that category, '80s, '90s up to today. Then you have named some of the Patsy Cline's and Anne Murray's, the older artists.
LISTNUM 1 \l 15043 Are you going to be sort of day‑parting your programming or are you going to mix it all up?
LISTNUM 1 \l 15044 MR. LARCHE: I will let Ted talk a little bit more about that, but we do mix it all up and we do feature some of what we call "classic country". We call them "KICX Classic Cuts" and we position those not every hour but through the day for those country fans who do enjoy some of the older heritage stuff.
LISTNUM 1 \l 15045 Ted, do you have anything to add to that?
LISTNUM 1 \l 15046 MR. ROOP: We do mix it up. We have a very good era balance between all of the artists. We don't do any day‑parting. We try to go with sort of a Gold Record and a Current Record and a Gold Record and a Current Record. So we split it up almost about 50:50.
LISTNUM 1 \l 15047 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15048 Where do you think you will slot in the emerging artists?
LISTNUM 1 \l 15049 MR. ROOP: The emerging artists would be part of our Current Records. They would go in as a current. It doesn't matter if it's Canadian or international, it's 50:50 Gold/Current.
LISTNUM 1 \l 15050 COMMISSIONER del VAL: I was also looking at the study that you filed with your application.
LISTNUM 1 \l 15051 Is that an excerpt from the study? Because what I seem to have is about five pages, and that is on your application Addendum 2.
LISTNUM 1 \l 15052 MR. ROOP: Yes.
LISTNUM 1 \l 15053 COMMISSIONER del VAL: Would it be possible for you to file the full study?
LISTNUM 1 \l 15054 MR. LARCHE: That is the full study.
LISTNUM 1 \l 15055 COMMISSIONER del VAL: Oh, all right.
LISTNUM 1 \l 15056 I know that you said that the respondents were asked: Are there any stations you can listen to like that now? Meaning country.
LISTNUM 1 \l 15057 MR. ROOP: Yes.
LISTNUM 1 \l 15058 COMMISSIONER del VAL: I couldn't interpret from the study that you filed the answers to that question.
LISTNUM 1 \l 15059 MR. LARCHE: I can't remember the number off the top of my head, but it is in there and I can get that number back to you.
LISTNUM 1 \l 15060 COMMISSIONER del VAL: More specifically, I know that you have identified in your supplementary brief that the reason that the current country station has only a 3 percent share is because the FM sound is not optimal for music.
LISTNUM 1 \l 15061 Now, were the participants in the study asked specifically: Why are you not listening to the current AM country station?
LISTNUM 1 \l 15062 MR. LARCHE: No, they were not.
LISTNUM 1 \l 15063 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15064 MR. LARCHE: We are basing that on what is I think pretty well generally accepted in the industry today, is that AM radio particularly ‑‑ when we say a 3 share, that is under the age of 50.
LISTNUM 1 \l 15065 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 15066 MR. LARCHE: The station share is higher than that. Certainly when you go over the age of 50 I think it jumps up to a 21 or 22 share. I think that is just reflective of what we have seen in several markets and not just in country in different formats. As the demographics get older, the demographic group that likes to listen to music on radio, if given a choice, would prefer FM over AM. We have seen it time and time again.
LISTNUM 1 \l 15067 So we did not specifically ask the question, but we feel pretty convinced that is the situation, because Rogers are very good programmers and it wouldn't be an issue that the product isn't good, it is an issue of the product is on AM.
LISTNUM 1 \l 15068 COMMISSIONER del VAL: We won't have the record show that the table is falling apart on you right there.
LISTNUM 1 \l 15069 MR. LARCHE: Thank you.
LISTNUM 1 \l 15070 I tried very nonchalantly to fix it, but it's not working. Oh, here we go. We are good. Thank you.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15071 COMMISSIONER del VAL: Now then, can you tell me more about the differences you see between your FM country station and the AM country station?
LISTNUM 1 \l 15072 MR. LARCHE: Certainly, the biggest one will be that we are on FM. We are a 24‑hour‑a‑day country station.
LISTNUM 1 \l 15073 What Rogers is doing ‑‑ and I want to pick my words carefully because I know that they are in the room and I don't want to speak on what their intentions are, however, I do know that they have already repositioned CIGM as Sudbury's news leader.
LISTNUM 1 \l 15074 I know that if you go to the front web page for their radio station you won't see the words "country music" or "music" for that matter. They are going with talk, I think from 6:00 p.m. until 6:00 a.m., and expanded news coverage. So the amount of country music they are playing is only between 6:00 a.m. and 6:00 p.m.
LISTNUM 1 \l 15075 The music they are playing will definitely be very similar to ours. We are not going to say we are playing different music, but we are playing it on the FM band.
LISTNUM 1 \l 15076 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15077 MR. LARCHE: Again, I would never be as presumptuous as to speak for Rogers, but I would think that they are heading in that news talk direction, as they have done in several other markets very successfully.
LISTNUM 1 \l 15078 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15079 Maybe we can talk about the spoken word programming right now.
LISTNUM 1 \l 15080 You have given us quite a bit of very good information in your October 17th response to deficiencies. I am referring to page 2 of the response, your answer to question 1(b).
LISTNUM 1 \l 15081 You said that 10 percent of your weekly programming ‑‑ and that 10 percent will equal 12 hours and 36 minutes ‑‑ would be devoted to spoken word and, of that, 20 percent of spoken word will be to news, which is 2 hours and 5 minutes, and then another 20 percent to regional sports, weather forecasts, traffic and road reports.
LISTNUM 1 \l 15082 Now, what about the other 60 percent? I know you go on to list the other things you do in answer to 1(c). Could you give us a further breakdown?
LISTNUM 1 \l 15083 MR. LARCHE: Sure. Sure.
LISTNUM 1 \l 15084 Community clips, that will be 126 minutes or 17 percent; our recreation reports are 96 minutes or 13 percent; our community cruiser, this is over the course of the week of course, 68 minutes or 9 percent; our emerging artists vignettes are 28 minutes; and then the other 25 minutes are mandated announcer community talk every hour where they talk about what is going on in the community, public service announcements, and so on.
LISTNUM 1 \l 15085 Just because I know this has come up a lot in the last few days, we can submit, if you want, a matrix of all of our programming throughout the course of the week that highlights when these things air. We would be more than happy to do that for you, if it would clarify.
LISTNUM 1 \l 15086 COMMISSIONER del VAL: That would be great, if you could please file that. Yes.
LISTNUM 1 \l 15087 MR. LARCHE: We have that with us here today.
LISTNUM 1 \l 15088 COMMISSIONER del VAL: I know Ms Dionne will want to ask: When do you think you could file that, please?
LISTNUM 1 \l 15089 MR. LARCHE: Right after we are done.
LISTNUM 1 \l 15090 COMMISSIONER del VAL: Perfect. Thank you.
LISTNUM 1 \l 15091 Then, just when you are talking about the produced community features, is that also going to be live or ‑‑
LISTNUM 1 \l 15092 MR. LARCHE: No. They are pre‑produced by our news team.
LISTNUM 1 \l 15093 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15094 MR. LARCHE: We do this already in our other stations so we have the template and the model.
LISTNUM 1 \l 15095 Our news department, we run news in the morning and at noon and then later in the afternoon, so there is about a five or six‑hour period where the news department is gathering information. One of their jobs is to put these community clips together.
LISTNUM 1 \l 15096 What it is, is basically it's a ‑‑ we will use a public service announcement as an example.
LISTNUM 1 \l 15097 If something is going on in the community, instead of just saying this is going on, what we will do is we will call the person who is organizing it, we will interview them. Our news department will interview them on‑the‑air, we will record little bits about, you know, where this event is, why you are doing it, so on so forth. So it's a lot more of a detailed thing than just mentioning it.
LISTNUM 1 \l 15098 If there is a cultural event going on we ‑‑ and we might do a series of them as well. Sometimes if there is, you know, an event going on for a week that we know the community is interested in, we will do a series of them so that we will follow up on it.
LISTNUM 1 \l 15099 So we pre‑produce them because it allows us to edit them and make sure that we are giving the meat. But they are done every day and they are done through the year.
LISTNUM 1 \l 15100 And we have a great response to them. They are actually a very good programming tool.
LISTNUM 1 \l 15101 COMMISSIONER del VAL: Great.
LISTNUM 1 \l 15102 You were talking about local, regional and national sports as part of your spoken word and you said an emphasis will be placed on local sports.
LISTNUM 1 \l 15103 "Emphasis" is sort of more than 50 percent or predominantly it's all local sports activities?
LISTNUM 1 \l 15104 MR. LARCHE: Our news and our sports, we do run more than 50 percent local. Our feeling is that if there is a huge international story that people will probably not seek us out to get all the detailed information. We will certainly let them know about it, but ‑‑ particularly in some of the competitive markets we are in where there are 24‑hour live news talk stations.
LISTNUM 1 \l 15105 So what we try to do, particularly in the sports and in news, is go local. You know, we strive for about 60 percent local and the other 40 percent would be regional and national/international. Of course, depending on the day, that can move around, but that's what we have mandated our news people to do. I think that is what, as we said, is a success to radio, is you have to be local.
LISTNUM 1 \l 15106 The only thing that we have going for us in this time of so much technology changing, satellite radio ‑‑ I haven't got one yet but, you know, a few of my friends do and they are pretty compelling. They have a lot of good programming on them and, you know, Internet radio.
LISTNUM 1 \l 15107 I do have an iPod and my kids do, Ted does, we all do. The only thing that is going to separate radio apart from all of these other technologies is being local. So we really consider it our only competitive advantage.
LISTNUM 1 \l 15108 I know it sounds a little like what you want to hear, but this is ‑‑ you know, this is something that we really believe as a company is true to our long‑term survival and if we are not serious with it, you know, we can certainly be out of business pretty quick.
LISTNUM 1 \l 15109 COMMISSIONER del VAL: That leads me to, I believe you said that you will have two full‑time ‑‑ is it two full‑time staff in the Sudbury station or two full‑time news staff?
LISTNUM 1 \l 15110 MR. LARCHE: Two full‑time news. One news director and another news person, and we also will have part‑time news people for weekends.
LISTNUM 1 \l 15111 COMMISSIONER del VAL: All right. So how many staff do you anticipate placing in the Sudbury station all together?
LISTNUM 1 \l 15112 MR. LARCHE: On‑air we will have three full‑time announcers, we will have two news people, we would have obviously a station manager/general sales manager. One of our announcers would act as the program director, just as Ted does in Midland. He also does the morning show and cleans the office on Thursdays ‑‑
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15113 MR. LARCHE: But he's really good at it.
LISTNUM 1 \l 15114 We have to run, you know, a lean ship, and we have to ‑‑ you know, again, as I said in our opening remarks, this is a balancing act and we know what you want, we know what the Broadcast Act wants and we know what the community wants, but we always have to make sure that we are positioning ourselves for inevitable things that may come up and turn us down.
LISTNUM 1 \l 15115 With Kitchener, you know, we really had a devastating first year and a half when we launched because the signal that we were approved with turned out to be totally inadequate. People could not hear us. It was a disaster, frankly. We had to immediately re ‑‑ and this was something that no one could foresee. Other people had applied for this frequency.
LISTNUM 1 \l 15116 It was something called thermal ducting, which I will not pretend to know, from a Christian station in Buffalo, but needless to say it ‑‑ nobody could hear us.
LISTNUM 1 \l 15117 So it really knocked us back on our business plan, knocked us back on where we thought we would be, because we had to reapply for a new frequency. There are few frequencies down there, it was a competitive process, but the CRTC, in its infinite wisdom, did help us there and so we have only been with this new frequency for a year and a half. So we are kind of in year one of where we thought we would be two years ago.
LISTNUM 1 \l 15118 The only reason I'm bringing this up is because, you know, I know as an owner/operator that you have to know how to run the business smart and lean and we are not sitting here with the biggest expenditures in programming or maybe in some other areas. We look at synergies.
LISTNUM 1 \l 15119 We know what we are mandated to do, but we also have to make sure that we position ourselves. I think our business plan is very realistic that way.
LISTNUM 1 \l 15120 Sudbury is ‑‑ I have a lot of respect for Rogers and for Newcap. Newcap is a minority partner with us in Kitchener. Whoever gets that licence it is not going to be a walk in the park.
LISTNUM 1 \l 15121 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 15122 MR. LARCHE: That's why we position ‑‑ I know I'm rambling a little on your question, but I think that tells you how we are going to set up our staff.
LISTNUM 1 \l 15123 COMMISSIONER del VAL: No, you are not rambling, because those were areas that I had intended to ask on and so it leads me into those areas.
LISTNUM 1 \l 15124 MR. LARCHE: All right.
LISTNUM 1 \l 15125 COMMISSIONER del VAL: But before I go there, before I forget this, this point is just on the staffing of the Sudbury station.
LISTNUM 1 \l 15126 MR. LARCHE: Yes...?
LISTNUM 1 \l 15127 COMMISSIONER del VAL: The two news people and three full‑time announcers, do the three full‑time announcers overlap with the two news people at all?
LISTNUM 1 \l 15128 MR. LARCHE: Yes. Much in the same way as it was described yesterday by some broadcasters, we have one news person who works in the morning. They do the on air stuff. They also do some of the ‑‑ what they will do is, in the afternoon they will work on community clips or they will go cover interviews and do the reporting.
LISTNUM 1 \l 15129 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15130 MR. LARCHE: Then we have an afternoon person that comes in and they work from noon until 6 o'clock, and then we have part‑time stringers they are called who will also cover City Council meetings and bring stories in for us. We usually just pay them on a per‑story basis and they come in on weekends.
LISTNUM 1 \l 15131 Our three announcers would be ‑‑ we would have a morning show host who would work from 6:00 to 10:00, then we have a midday person 10:00 to 3:00, and then we have an afternoon drive person who would work from 3:00 to 7:00.
LISTNUM 1 \l 15132 You will ask about voicetracking. Yes, we will voicetrack in the evening from 7:00 to midnight, but that will be locally produced for that market. We will also voicetrack overnight.
LISTNUM 1 \l 15133 On weekends we go live from 6:00 a.m. to 6:00 p.m. and we voicetrack in the evenings.
LISTNUM 1 \l 15134 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15135 Is that pretty similar to the setup you have in, say, your Kitchener station?
LISTNUM 1 \l 15136 MR. LARCHE: More similar to Midland.
LISTNUM 1 \l 15137 Kitchener is a bigger market, it's more competitive, we have more staff there.
LISTNUM 1 \l 15138 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15139 MR. LARCHE: We have three, you know, three or four people in our morning show in Kitchener. It is just a much bigger, more competitive market so we have more resources there.
LISTNUM 1 \l 15140 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 15141 MR. LARCHE: But this is very, very similar to what our Midland operation is and, again, Midland or that part of Central Ontario and the market we compete in there with Barrie, Orillia, Midland, you know, the population is slightly bigger than Sudbury but the dynamics are not that different. The format, you know, there is a Rock station FM, there is an AC, there is a Hot AC.
LISTNUM 1 \l 15142 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15143 MR. LARCHE: So from that respect, other than the fact that in Central Ontario we get a lot of spill from Toronto, so a lot of tuning goes out of the market. Sudbury there is no spill and it is one of the things I miss from working up there, is at least your competition you can see them.
LISTNUM 1 \l 15144 COMMISSIONER del VAL: Will there be times that ‑‑ during what times of the 24‑hour day will your Sudbury station be not manned ‑‑ or womaned, sorry?
LISTNUM 1 \l 15145 MR. LARCHE: Personned?
LISTNUM 1 \l 15146 COMMISSIONER del VAL: Yes, personned. Yes.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15147 MR. LARCHE: Well, I guess assuming the afternoon drive person left right after they are finished at 7:00, you could say from 7:00 until probably the morning people come in at 4:00 or 5:00 the next morning.
LISTNUM 1 \l 15148 But again, this is the way many radio stations operate. We do know that we have to be on call.
LISTNUM 1 \l 15149 Ted, maybe you might want to talk about some of the things we do to make sure that we can react very quickly if we have to get into the radio station.
LISTNUM 1 \l 15150 MR. ROOP: In Midland our news director is on call 24/7. Also, we have given his cell phone number to the police and the fire and the city just in case there are problems. Actually, we have it set up where our news line is actually forwarded to his cell phone ‑‑ which probably he doesn't like all the time, but it is and there have been times actually when he has been called in. We have had weather emergencies or other problems, Amber Alerts, and he has been at the station within about five minutes of when that happens. It is a great system and it works very well for us.
LISTNUM 1 \l 15151 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15152 Automated programming. What part of the day do you anticipate that you will have automated programming and sort of ‑‑ well, yes ‑‑ or the duration of such programming?
LISTNUM 1 \l 15153 MR. LARCHE: I'm not sure what you mean by "automated".
LISTNUM 1 \l 15154 COMMISSIONER del VAL: Voicetrack.
LISTNUM 1 \l 15155 MR. LARCHE: Voicetrack. That is 7:00 p.m. through to 6:00 a.m. the next morning.
LISTNUM 1 \l 15156 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15157 MR. LARCHE: So using the broadcast week, 7:00 p.m. until midnight.
LISTNUM 1 \l 15158 COMMISSIONER del VAL: All right. Thank you.
LISTNUM 1 \l 15159 You have the Midland station and the Kitchener station.
LISTNUM 1 \l 15160 What resources do you plan to share with those stations? What synergies will you have with those stations?
LISTNUM 1 \l 15161 MR. LARCHE: Well, most of them would be probably more admin. A lot of them would be administration. Certainly, you know, our accounting, our traffic scheduling for commercials. We would definitely centralize that. Engineering.
LISTNUM 1 \l 15162 In terms of programming, we believe it is important that we have a program director in Sudbury, who lives in Sudbury, who understands Sudbury, but Ted is our Regional Program Director so that he would report through to Ted. Right now our program director in Kitchener and Ted spend a lot of time on the phone talking about, you know, music ads, and so on so forth, what's going on in the community.
LISTNUM 1 \l 15163 So we would have the three of them working in concert, you know, just talking about what is going on at the radio stations. But certainly from a news point of view, if there was a major story in one of our other markets that we could send a clip up to we would, but that is certainly not in the plans. Because again it goes back to we have to be local and you can't be local running Sudbury out of Midland.
LISTNUM 1 \l 15164 COMMISSIONER del VAL: What about the playlists?
LISTNUM 1 \l 15165 MR. LARCHE: Do you want to talk to that a little, Ted?
LISTNUM 1 \l 15166 MR. ROOP: The music playlist?
LISTNUM 1 \l 15167 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 15168 MR. ROOP: Yes. Our music meetings we do right now with Kitchener and Midland, we match up every Thursday and we get together and talk about our ads and what we are going to add.
LISTNUM 1 \l 15169 There are some local artists that fit in more in Kitchener and vice versa, fit in more in Midland. For the most part, though, our playlists are the same.
LISTNUM 1 \l 15170 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15171 Now, these are what I call housekeeping items.
LISTNUM 1 \l 15172 Your funds that are earmarked to the Canadian Country Music Association, CCMA, and to the Canadian Music Week, can you just give a breakdown of how much each year to CCMA and how much each year to the CMW?
LISTNUM 1 \l 15173 MR. LARCHE: I think it's $10,000 per year to each group.
LISTNUM 1 \l 15174 The CCMA is ‑‑ I'm also on the Board of the CCMA, but I have no influence on how they take this money. Many radio stations contribute money to the fund.
LISTNUM 1 \l 15175 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15176 MR. LARCHE: It is primarily set up to help emerging artists, and often what they do with that money is they will bring new artists to Canadian Country Music Week ‑‑ which is in September and it moves around the country ‑‑ and allow these artists to be showcased at events throughout the weekend. That's where you have all the record people and radio people together, so it's great money spent for that.
LISTNUM 1 \l 15177 COMMISSIONER del VAL: StarQuest talent. How much to that per year?
LISTNUM 1 \l 15178 MR. LARCHE: That is $10,000 per year.
LISTNUM 1 \l 15179 COMMISSIONER del VAL: All right, great.
LISTNUM 1 \l 15180 I just want to clarify your commitment to broadcasting of emerging artists. You said 5 to 10 percent, but I want to know whether it is 5 to 10 percent of Canadian content or 5 to 10 percent of all your music, musical selections.
LISTNUM 1 \l 15181 MR. LARCHE: It's 5 to 10 percent of all of our musical selections.
LISTNUM 1 \l 15182 COMMISSIONER del VAL: Your business case. You said that you expect your station to have minimal impact on current local broadcasters, particularly the country AM station.
LISTNUM 1 \l 15183 What we have right now in the market is Rogers Adult Rock, which targets 18 to 49 years old; their AC station which is 35 to 64; Country, 45 to 64; and then Newcap's Classic Hits which targets about, say, 25 to 49.
LISTNUM 1 \l 15184 So there is quite an overlap between the audience your advertising would be targeted to and those of the existing stations.
LISTNUM 1 \l 15185 Why do you say that it will be "minimal impact"?
LISTNUM 1 \l 15186 MR. LARCHE: Well, I guess it is how you define "minimal", because I think we did say that 40 percent of our revenue would come from the incumbent stations ‑‑
LISTNUM 1 \l 15187 COMMISSIONER del VAL: Yes.
LISTNUM 1 \l 15188 MR. LARCHE: ‑‑ which I think is higher than what a lot of other applicants said, so to put that into context.
LISTNUM 1 \l 15189 But country, the way we sell country is we very much sell it as a format that is unique, has a unique loyal type of listener and, you know, we have been ‑‑ Linda and our sales manager in Kitchener have been very successful at it. We know how to sell country.
LISTNUM 1 \l 15190 I believe some people shy away from country simply because they feel it's a little bit more difficult to sell than maybe one of the more mainstream formats. We happen to know how to sell it and be successful with it and bring new people to it.
LISTNUM 1 \l 15191 There is no doubt that if we are going to have more impact on one station than any other it would most likely be CIGM, although we don't ‑‑ obviously we don't know how much they are billing. We know that Rogers does very well. We know that they combine that station with other stations as they are selling them together, but I think 40 percent ‑‑ again going back to the way we opened this thing ‑‑ is, I think, very realistic.
LISTNUM 1 \l 15192 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15193 Now, Sudbury has the highest retail sales per capita amongst the major Ontario cities, and yet the income per capita is actually ranked substantially lower.
LISTNUM 1 \l 15194 Why do you think that Sudbury's retail market will grow to the extent of being able to support an additional station, let's just say one for now?
LISTNUM 1 \l 15195 MR. LARCHE: Well, again, I don't have it right in front of me but I know that retail sales growth in Sudbury, if memory serves me right, is tracking about ‑‑ is at 20 percent. I think it is the highest in that area.
LISTNUM 1 \l 15196 But I think certainly what Wendy Watson talked about yesterday in that market, and Commissioner French, the economics of that market are again very much driven by the price of nickel, and the price of nickel is very strong right now. Of course, none of us know how long that's going to stay, but certainly the growth going on in China it really positions a market like Sudbury for the long term.
LISTNUM 1 \l 15197 COMMISSIONER del VAL: I'm glad you referred to the discussion yesterday because that was the part that I was anxious to get to, because you are entering into a market where like in broadcasting terms we call it there is competitive imbalance.
LISTNUM 1 \l 15198 You also heard the exchange, I think yesterday, from Newcap and then also from the Connelly group about sort of the plight of the standalone station.
LISTNUM 1 \l 15199 MR. LARCHE: Yes.
LISTNUM 1 \l 15200 COMMISSIONER del VAL: I also noted, quite independent from that, I was going to ask you on the comments that you made in your supplementary brief and also this morning about being the independent entering into such a market.
LISTNUM 1 \l 15201 I would like to hear more about your views on that and the place for the independent broadcaster or station in such a market and how do you plan to conquer the competitive imbalance.
LISTNUM 1 \l 15202 MR. LARCHE: Great question.
LISTNUM 1 \l 15203 First of all, to start with the importance of an independent ‑‑ and I know you have several independents who are vying for this thing ‑‑ the obvious of course is that we bring a new voice to the market. We bring a new voice that is not mandated from a head office, can react to the market.
LISTNUM 1 \l 15204 Being a small, independent broadcaster one of the biggest advantages I still believe, beyond what I talked about at the beginning, is that we can make a decision immediately and we can react to something going on in the market and react to any competitive changes.
LISTNUM 1 \l 15205 In terms of competing against the big guys, you know it really gets down to the product you put out. If you put out a good, local, quality product the person at the other end of the radio doesn't know if it's owned by an independent or if it's owned by a huge multinational company. They know that they like it because it's good.
LISTNUM 1 \l 15206 Our mandate is always ‑‑ our mission is "MOCHA", "make our customers happy". Ask them what they want and give it to them. Asked them what they want and give it to them. Ask them what they don't want and stop giving that to them.
LISTNUM 1 \l 15207 Doing that has allowed us to compete in markets where ‑‑ again Central Ontario, we are up against two combos there. You know, there is Corus, we compete against Rogers in Kitchener and CHUM, so we can hold our own as long as we stick true to our values of making sure that we put out a good product.
LISTNUM 1 \l 15208 Just the second answer to that question would be that for us ‑‑ you asked: How do we compete? I think the other thing that we have to do is we have to be very realistic in our business plan. I can come in front of you and I can put all kinds of stuff in my business plan about how much money we are going to spend here and there, and so on and so forth, but often at the end of the day if it is not a conditional licence things can change.
LISTNUM 1 \l 15209 I like to come in with, you know, a business plan that is sound, that would allow us to adapt to any market dynamics and, heaven forbid, a frequency issue like we had in Kitchener. Again, that is something I think the smaller companies can do a little better. We don't have a lot of the overhead costs that they do and ‑‑
LISTNUM 1 \l 15210 I don't know if that answers your question.
LISTNUM 1 \l 15211 COMMISSIONER del VAL: No, that does. I'm sorry, I gestured as if I was going to interrupt you. I shouldn't have done that.
LISTNUM 1 \l 15212 But when you were talking about Midland, I just want to know: Who are you up against in Midland and who are you up against in Kitchener?
LISTNUM 1 \l 15213 MR. LARCHE: Well, in Midland we are a standalone in the town of Midland, but that part of Ontario, as some Commissioners might know, is considered one region, Midland, Orillia, Barrie, so we very much compete against the stations in those markets.
LISTNUM 1 \l 15214 So Corus has two radio stations in Barrie and there is another independent in Barrie, Doug Bingley who owns two radio stations.
LISTNUM 1 \l 15215 Rogers has a radio station in Orillia.
LISTNUM 1 \l 15216 We have had an affiliation with Rogers through an LSA in the past. It is probably going to come up so I might as well come and talk about it right now. This is something that when the new definition came down we felt that we had to break apart and we are in the process of doing that right now.
LISTNUM 1 \l 15217 COMMISSIONER del VAL: I don't want you to have to disclose any of your own and trade secrets, but say Connelly yesterday referred specifically in terms of their plans to compete or conquer with lower advertising rates, targeting the smaller businesses, and we all know about being local, local, local.
LISTNUM 1 \l 15218 Do you have any sort of specific plans on competing? Do you intend to come in with, say, lower advertising rates, or do you have any plans on who you are going to target?
LISTNUM 1 \l 15219 MR. LARCHE: Heavens, no!
LISTNUM 1 \l 15220 COMMISSIONER del VAL: All right.
LISTNUM 1 \l 15221 MR. LARCHE: No, we wouldn't come in with lower advertising rates. Low rates ‑‑ radio is undervalued in general and certainly low rates do not ‑‑ it's just not good for the business. Radio ‑‑ and I'm not talking about just for us, for any radio ‑‑ should always be striving to get what it is worth, particularly as it competes against television or print for example.
LISTNUM 1 \l 15222 But we don't have any specific secrets when it comes to doing business in terms of doing stuff different, other than what we already do and what we stand for. Again going back to MOCHA, our sales philosophy ‑‑ and maybe Linda can talk about it for a second ‑‑ but we really want to find out what the advertiser's problems are and then we like to come back and help them with a marketing plan that is based on addressing the problems that they are having.
LISTNUM 1 \l 15223 So we spend a lot of time in our sales department training our staff on advertising. We try to consider ourselves advertising experts, not just radio experts, what works in advertising, what doesn't, you know, creative. Creative has to be emotional versus factual for it to register with a listener.
LISTNUM 1 \l 15224 So our approach is not necessarily one of "We are a country station". We come to a client and what we do is we want to partner with them to help their advertising be successful. We more often than not would say "You should not just advertise with us, you have to advertise with, you know, two or three radio stations. Let's find out what your needs are." We come back with a plan and that has made us very successful.
LISTNUM 1 \l 15225 Linda, do you have anything to add to that?
LISTNUM 1 \l 15226 MS YOUNG: The only thing I would like to add is, I think what makes us different than other radio stations is our clients are many times coming to us asking us for advice and they know we are going to give them the honest answer. If they are asking us, you know, "What should I be doing? Should I be doing television? Should I be dealing newspaper? Should I be doing another radio station?", we really do have an overall marketing plan for them and it is a great feeling to know that they are calling you because they really do think your team, our management team as well as our sales team, are experts in the market. That is the same thing we would do in Sudbury.
LISTNUM 1 \l 15227 COMMISSIONER del VAL: Thank you very much. Thank you for your time.
LISTNUM 1 \l 15228 Those are my questions, unless you have something to add to Ms Young's answer, Mr. Larche?
LISTNUM 1 \l 15229 Thank you.
LISTNUM 1 \l 15230 MR. LARCHE: No, I'm fine. Thank you.
LISTNUM 1 \l 15231 COMMISSIONER del VAL: Those are my questions, Madam Chair.
LISTNUM 1 \l 15232 Thank you.
LISTNUM 1 \l 15233 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15234 Vice Chairman Arpin..."
LISTNUM 1 \l 15235 COMMISSIONER ARPIN: Thank you, Madam Chair.
LISTNUM 1 \l 15236 A few questions, Mr. Larche and Mr. Roop. I will start with synergies.
LISTNUM 1 \l 15237 When I heard Mr. Roop replying regarding the music playlists and the discussions that he was having with the program people in Kitchener on a weekly basis, his answer prompted my attention.
LISTNUM 1 \l 15238 Are you producing a Central music log?
LISTNUM 1 \l 15239 MR. ROOP: No, we produce our own music logs in Kitchener and Midland and we would produce our own in Sudbury as well.
LISTNUM 1 \l 15240 COMMISSIONER ARPIN: In Sudbury.
LISTNUM 1 \l 15241 MR. ROOP: It's kind of nice to have ‑‑ well, two heads are better than one, so when we are doing our music meetings ‑‑
LISTNUM 1 \l 15242 COMMISSIONER ARPIN: Yes, okay. So I can understand that.
LISTNUM 1 \l 15243 MR. ROOP: Yes.
LISTNUM 1 \l 15244 COMMISSIONER ARPIN: Obviously it allows you to discuss new ‑‑
LISTNUM 1 \l 15245 MR. ROOP: Exactly.
LISTNUM 1 \l 15246 COMMISSIONER ARPIN: ‑‑ entries and to share views.
LISTNUM 1 \l 15247 Regarding other aspects like traffic, accounting, will it be centralized somewhere or will it be done in each of the stations?
LISTNUM 1 \l 15248 MR. LARCHE: Traffic, scheduling commercials traffic, would be centralized. We do that currently. Even for Kitchener we do it out of Midland. The technology allows us to very easily do that.
LISTNUM 1 \l 15249 COMMISSIONER ARPIN: I see.
LISTNUM 1 \l 15250 And accounting ‑‑
LISTNUM 1 \l 15251 MR. LARCHE: Accounting as well.
LISTNUM 1 \l 15252 COMMISSIONER ARPIN: ‑‑ billing and collections and everything, that is done centrally as well?
LISTNUM 1 \l 15253 MR. LARCHE: Well, we have our sales reps do the collections.
LISTNUM 1 \l 15254 COMMISSIONER ARPIN: I'm sure, yes, but ‑‑
LISTNUM 1 \l 15255 MR. LARCHE: But, yes. That only makes good business sense for us and, again, technology allows us to do that.
LISTNUM 1 \l 15256 COMMISSIONER ARPIN: All right. That's what I wanted.
LISTNUM 1 \l 15257 In your oral presentation at the top of page 5 you quoted that you were in support of the CAB intervention at this hearing regarding emerging artists and regulatory mechanism.
LISTNUM 1 \l 15258 The CAB has put forward a definition of what they will call an emerging artist, but they also say in their brief that it might not be the optimum definition at some point in time.
LISTNUM 1 \l 15259 Since you are saying that you are supporting the intervention, what are you really supporting?
LISTNUM 1 \l 15260 MR. LARCHE: I am supporting the spirit of the intervention. I really believe that all the stakeholders have to get together and come up with some definitions that would be acceptable to the CRTC. We hope that ‑‑ and now I am speaking a little bit for the CAB because I am on the Radio Board ‑‑ the CAB hopes that we can get some dialogue going with the Commission to come up with some standards and some definitions and a mechanism that is very clear.
LISTNUM 1 \l 15261 Because right now, as you could tell by the line of questioning over the last few days, it is a little bit gray. Frankly, we are not even 100 percent sure exactly how it works or how it will be measured.
LISTNUM 1 \l 15262 COMMISSIONER ARPIN: So what you are supporting is that somewhere there has to be flexibility.
LISTNUM 1 \l 15263 MR. LARCHE: There has to be.
LISTNUM 1 \l 15264 COMMISSIONER ARPIN: It's not a one‑size‑fits‑all.
LISTNUM 1 \l 15265 MR. LARCHE: No. I think in our deficiency question when it came up, we also made the point very clear that no one has a better track record in country than we do, I think, for emerging artists and we can compare our emerging artists airplay to others looking at it through a BDS, and so on. But we don't control the supply. That's a big concern that we have.
LISTNUM 1 \l 15266 I can't speak for other formats, but in country it is a very cyclical flow of when stuff comes out. There seems to be certain times of year where, you know ‑‑ for example around Canadian Country Music Week where everybody will be releasing something new, and then we can go through some dry spells and then we can go through a period where there is a lot of goods.
LISTNUM 1 \l 15267 So we don't like to limit ourselves on what we play. If there is a lot of good stuff we want to play all of it, but if there is nothing coming out over the course of a three or four‑week period, then that concerns us a lot to have a quota.
LISTNUM 1 \l 15268 I proposed in my note back to the Commission that if you do impose something like this as a condition of licence, I would propose that the Commission consider averaging it over the course of a year. So take 52 weeks of what you are doing and divide it by 52, because there will be times a year where we can play more than other times of the year.
LISTNUM 1 \l 15269 That is, of course, just a very humble suggestion, but I think it ties into what the CAB wants to sit down and talk about as well.
LISTNUM 1 \l 15270 COMMISSIONER ARPIN: We may have to quadruple the number of staff, and even more than that if we start to monitor on a yearly basis. We already have a hard time doing it on a weekly basis. As you know, we sample a day and multiply by five or sometimes by seven, so if we were to do it a yearly basis we are going to be told that were running an empire.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15271 MR. LARCHE: Well, I don't have all the answers, I'm sorry.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15272 COMMISSIONER ARPIN: All right. Thank you for that aspect.
LISTNUM 1 \l 15273 You answered that Diane was 39 and Jack was 41, if my memory serves me well, so I guess that your primary target would then be 35‑44?
LISTNUM 1 \l 15274 MR. LARCHE: That's correct.
LISTNUM 1 \l 15275 COMMISSIONER ARPIN: That's correct.
LISTNUM 1 \l 15276 Finally, how many stations do you think the Sudbury market could afford at this time? There currently are four commercial stations ‑‑ five, because the French radio station is also commercial. But on the English‑speaking side we are talking about four commercial radio stations.
LISTNUM 1 \l 15277 I will help you with my secondary question, if I may.
LISTNUM 1 \l 15278 If the answer is more than one ‑‑
LISTNUM 1 \l 15279 MR. LARCHE: I know it's coming.
LISTNUM 1 \l 15280 COMMISSIONER ARPIN: If the answer is more than one, which one will have the least impact on your business plan and which one will have the most impact on your business plan?
LISTNUM 1 \l 15281 MR. LARCHE: Again, when we talked about the economics of Sudbury and where it's at, there is some in balance in the sense of ‑‑ particularly after Newcap shared with us yesterday that they only pick up 10 percent of that EBIT, certainly the market is profitable, but it certainly seems like a good chunk of it is going to the major player there. Again, that is no surprise, they are smart broadcasters and they know what they are doing.
LISTNUM 1 \l 15282 I would hope it's one, but I know that if you are following the Broadcast Act and the numbers that are out there right now you will license two, so if it is two, yes, we would certainly want to be one of the two.
LISTNUM 1 \l 15283 In terms of which one would have the least impact on us, certainly from a programming point of view it would be Newcap because they are targeting youth and we are not, so certainly from a "business point of view, advertising point of view", we wouldn't really be competing with them on a dollar sense, however, we would be competing against a combo and a trio.
LISTNUM 1 \l 15284 You know, I have no illusions that whoever gets this, the first few years particularly are going to be tough and I think it's very important that whoever you put in there ‑‑ and, like I say, there are some great applications, please have good confidence that you feel that they can do it because it can ‑‑ as we found it in Kitchener, if you get a couple of hiccups it get can really shake you up, let alone your banker.
LISTNUM 1 \l 15285 COMMISSIONER ARPIN: Well, Madam Chair, those were my questions.
LISTNUM 1 \l 15286 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15287 Legal counsel.
LISTNUM 1 \l 15288 MS DIONNE: I have two questions regarding your contribution to Canadian development.
LISTNUM 1 \l 15289 I know you understand in your basic contribution that will be applied by way of regulation.
LISTNUM 1 \l 15290 As for your over and above commitment that we like to call as over and above ‑‑
LISTNUM 1 \l 15291 MR. LARCHE: It's a good term.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15292 MS DIONNE: ‑‑ you propose to allocate 40 percent of your over and above to FACTOR.
LISTNUM 1 \l 15293 I just want to clarify whether you would accept this as a condition of your licence?
LISTNUM 1 \l 15294 MR. LARCHE: Yes.
LISTNUM 1 \l 15295 MS DIONNE: Regarding your contribution to StarQuest Talent Search of $10,000, could you provide a breakdown of the actual amounts?
LISTNUM 1 \l 15296 I think you want to spend amounts to hard costs like equipment, rentals, studio time and production of CDs, so what would these amounts be?
LISTNUM 1 \l 15297 MR. LARCHE: $2,500 for the venue, stage, sound, lights; $5,000 for the recording session, the studio that the person would go to; and another $2,500 would go for the reproduction of the CDs and distribution.
LISTNUM 1 \l 15298 MS DIONNE: Thank you, Madam Chair.
LISTNUM 1 \l 15299 THE CHAIRPERSON: Mr. Larche, just a couple of questions with regards to emerging artists.
LISTNUM 1 \l 15300 I note your commitment to emerging artists in your current markets of Kitchener and Midland, do you play emerging artists from Kitchener in Midland and vice versa?
LISTNUM 1 \l 15301 Therefore, the second part of the question is: Whatever you do in those two markets are you going to do that with Sudbury, if licensed?
LISTNUM 1 \l 15302 MR. LARCHE: Well, certainly emerging artists, a good emerging artist we will play on all stations, you know, if it's good music. It doesn't matter if they are local or from Edmonton or whatever if they are good.
LISTNUM 1 \l 15303 But to answer your question, yes, we do. We have some great country artists in both the markets that we work in and that is one of the benefits, is we have been able to play their music and expose it in a market that isn't their home market.
LISTNUM 1 \l 15304 Ted, give us some examples. We have Cathy Corpi.
LISTNUM 1 \l 15305 MR. ROOP: Yes, there is an artist named Cathy Corpi who is a local artist in Midland who gets airplay in Kitchener and she is just starting out and doing quite well.
LISTNUM 1 \l 15306 Carla Crawford is another one that is a local from Midland that is making it down in Kitchener now because she is having airplay on our radio station down there. She doesn't get very much exposure anywhere else so it is helping her out a lot, too.
LISTNUM 1 \l 15307 Then it happens the same way, that artists from Kitchener are getting airplay in Midland. Jason Blaine is one of those, and his career has really actually taken off in the last year, which is really good for him.
LISTNUM 1 \l 15308 Yes, local artists down there, Jamie Warren, Beverley Mahood, things like that.
LISTNUM 1 \l 15309 THE CHAIRPERSON: And they will make it up to Sudbury.
LISTNUM 1 \l 15310 MR. ROOP: They would all be playing in Sudbury, too, and then Sudbury would be playing in Kitchener and Midland as well.
LISTNUM 1 \l 15311 THE CHAIRPERSON: I can't resist, Jack and Diane? Are you going to launch with John Couger Mellencamp?
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15312 THE CHAIRPERSON: Those are all our questions.
LISTNUM 1 \l 15313 You have two minutes to summarize your application and tell us why this service is the best use of the frequency in Sudbury.
LISTNUM 1 \l 15314 MR. LARCHE: Thank you.
LISTNUM 1 \l 15315 I probably won't even use up my two minutes.
LISTNUM 1 \l 15316 I think there are five good, compelling reasons for you to consider us.
LISTNUM 1 \l 15317 The first one is that we are really going to fill the biggest unserved mass appeal format in that market and, contrary to the thought that we may not be increasing diversity, we will be increasing diversity was again a mainstream format. Country is a mainstream format now. It is ranked third or fourth in Canada, depending on where you are geographically. Sudbury deserves a mainstream FM country station.
LISTNUM 1 \l 15318 The second point is, I think again our business plan, it's sound, it's realistic, it's made to adapt to the market forces. We can ensure that we can live up to all of the commitments that we are making here and we can also run a business that will be profitable for us in the long term, but also give to the market what it wants.
LISTNUM 1 \l 15319 I think we have some great local initiatives that we are proposing. We very much want to reflect the culture of the market. Part of the culture in Northern Ontario and, frankly, in Central Ontario again is recreation, hunting, fishing, outdoors, snowmobiling, and we take that very seriously. Ted has done his morning show from his fishing hut. People love that stuff. You have to get into what people eat, live and breathe in those communities and reflect it and I think we do that better than anyone.
LISTNUM 1 \l 15320 I think we have a very good CCD proposal. I think it might rank ‑‑ I think it is tied for second or maybe even a little higher with the additional funds that we were asked to contribute to it.
LISTNUM 1 \l 15321 Finally, again, I think our company, we want to grow. We want to grow and we think that we can contribute a lot to the system over the next few years.
LISTNUM 1 \l 15322 There is more consolidation that seems to be coming down the road. Again, I think there were some great new broadcasters that were up in front of you today and, you know, we wish them luck, but I think we have the track record to tell you that we can deliver and we will deliver.
LISTNUM 1 \l 15323 So those are our reasons and we thank you for the opportunity.
LISTNUM 1 \l 15324 THE CHAIRPERSON: Mr. Larche and your colleagues, thank you very much for your participation today.
LISTNUM 1 \l 15325 We will now be taking a 15‑minute break. We will resume at 10:25.
LISTNUM 1 \l 15326 Thank you.
‑‑‑ Upon recessing at 1010 / Suspension à 1010
‑‑‑ Upon resuming at 1035 / Reprise à 1035
LISTNUM 1 \l 15327 THE CHAIRPERSON: Order, please.
LISTNUM 1 \l 15328 Madam Secretary.
LISTNUM 1 \l 15329 THE SECRETARY: We will now proceed with Item 18 on the Agenda, which is an application by the Haliburton Broadcasting Group Inc. on behalf of a corporation to be incorporated for a licence to operate an English‑language commercial FM radio programming undertaking in Sudbury.
LISTNUM 1 \l 15330 The new station would operate on frequency 88.5 MHz, Channel 203C, with an effective radiated power of 50,000 watts, non‑directional antenna, antenna height of 145 metres.
LISTNUM 1 \l 15331 Appearing for the applicant is Mr. Christopher Grossman who will introduce his colleagues. You will then have 20 minutes to make your presentation.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15332 MR. GROSSMAN: Good morning, Madam Chair and Commissioners. My name is Christopher Grossman and I am the President of the Haliburton Broadcasting Group Inc.
LISTNUM 1 \l 15333 Before we begin our presentation, please allow me to introduce the individuals with me on the panel. Bill Evanov is the President of Evanov Communications Inc., formally the Evanov Radio Group, which is the co‑applicant.
LISTNUM 1 \l 15334 Beside bill is Carmela Laurignano, Vice President and Radio Group Manager for ERG.
LISTNUM 1 \l 15335 Behind her is Sean Moreman, in‑house counsel for ERG and Controller for PROUD‑FM, the world's first commercial radio station targeted at gays and lesbians.
LISTNUM 1 \l 15336 Sitting beside Sean is Gary Gamble, the Corporate Program Director with ERG.
LISTNUM 1 \l 15337 Behind me is Paul Evanov, Vice President Operations of ERG.
LISTNUM 1 \l 15338 Beside me, on my left, is Wendy Grey, who is the Corporate News Director for the Haliburton Broadcasting Group.
LISTNUM 1 \l 15339 In this era of consolidation, both Haliburton and ERG are strong, independent broadcasters who have built reputations for serving under‑represented markets based on age, as in the case of the Jewel in Ottawa; language as in the case with CHYC in Sudbury, or on sexual orientation, as with PROUD‑FM in Toronto.
LISTNUM 1 \l 15340 As you will see, this application continues that reputation, as we are proposing a strong business model that intends to serve the mature audience in Sudbury.
LISTNUM 1 \l 15341 Our company, Haliburton, has been in operation for the 10 years. Since the beginning, our mandate has been to revive and operate successful radio stations in Northern Ontario in a way that other broadcasters have not been able to achieve.
LISTNUM 1 \l 15342 One of the first ventures was in the Sudbury market, which allowed us to reinvest in the northern radio markets and to grow to the 15‑station operation we are today, including the existing French‑language service in Sudbury. We have a map showing these stations included in our package.
LISTNUM 1 \l 15343 Our French station in Sudbury is really the driving force behind the remainder of the Haliburton French cluster. The synergies offered by this application to the French network will only serve to strengthen it. As a result, we are more able to move money into less profitable markets in order to deliver quality programming across the region.
LISTNUM 1 \l 15344 Through the synergies available with the English station we propose, both the new station and the existing station will be able to remain competitive in an industry that is becoming even more consolidated.
LISTNUM 1 \l 15345 Mr. Evanov has been in the radio business for over 30 years and operates stations in small, medium and major markets across Canada. The philosophy of the Evanov Radio Group is to serve under‑represented markets at each end of the demographic scale, and now the LGBT market. Two of the Evanov stations, the Jewel in Ottawa and CKDX‑FM in Newmarket, serve the 45‑plus age bracket and offer a similar format to the one we are proposing for Sudbury.
LISTNUM 1 \l 15346 When the call for a new service in Sudbury was released, we were very excited at the prospect of expanding our presence in Sudbury and to fulfil our mandate of providing quality service to an under served market with an English‑language service. We felt that with our experience in building a radio network across Northern Ontario, we would be able to develop a sound business plan that would properly serve the community.
LISTNUM 1 \l 15347 When we evaluated the market, we determined that the most popular demographic, 18 to 45‑year‑olds, is well served by the existing stations. In the 18 to 34 bracket, they have seen a 60 percent increase in tuning from 2004 to 2006.
LISTNUM 1 \l 15348 What became clear to us was that the radio service in the market was not addressing the needs of the 45‑plus listener and that they were tuning out as a result.
LISTNUM 1 \l 15349 We are aware of the success that Bill has had with today's Easy Listening format in Ottawa and Newmarket and I approached him to develop a similar model that would meet the needs of Sudbury radio listeners.
LISTNUM 1 \l 15350 The Jewel in Ottawa was able to undo a lot of listener dissatisfaction in the older demo and hours tuned increased 31 percent in the 55‑plus demographic in the one year since the station was launched.
LISTNUM 1 \l 15351 It is that dialogue that led us to where we are today. We feel that together we are able to bring diversity of editorial voice and ownership to a market to address the needs of Sudbury's under served 45‑plus radio listener.
LISTNUM 1 \l 15352 In addition to our French language service, the Sudbury market is also served by four major commercial English radio stations, as well as the CBC. Newcap's Classic Hits format, Rogers Easy Rock, Classic Rock and AM Country Music, Sports and Talk station.
LISTNUM 1 \l 15353 Of all the stations currently serving the Sudbury market, only the AM station is successful in attracting a majority of its listeners from the 50‑plus demographic and the top‑rated 50‑plus Station, CJMX‑FM, attracts only 37 percent of its cume rating in that demo. This fact is somewhat surprising, given the average age in Sudbury is above the national average and that 40 percent of the population in the market is over the age of 45.
LISTNUM 1 \l 15354 Combining the age factor in Sudbury with the fact that no FM music station successfully targets that demographic, we expected to find dissatisfaction with radio in Sudbury amongst the older age group.
LISTNUM 1 \l 15355 That is exactly what we discovered in our market research. Less than one quarter of the people aged 40‑plus said that they were satisfied with the radio offerings in the Sudbury market. Fifty‑six percent of the people stated that they would listen to radio more if there was something on the dial that appealed to them.
LISTNUM 1 \l 15356 Although Sudbury has seen an increase in radio tuning amongst most age groups over the last two years, that growth has been significantly lower among the older demographic. There has been no growth whatsoever among the 65‑plus age group.
LISTNUM 1 \l 15357 This tepid response to radio amongst the 45‑plus demographic is due largely to the lack of variety being offered by the stations in the market.
LISTNUM 1 \l 15358 We feel strongly that Diamond 88.5 will provide the variety and will appeal to the older demographics in order to bring them back to radio.
LISTNUM 1 \l 15359 Bill will tell you exactly how the playlist on Diamond 88.5 will speak to those older listeners.
LISTNUM 1 \l 15360 MR. BILL EVANOV: The format we are proposing for the Diamond is Today's New Easy Listening, a format of world‑class music we pioneered and made successful with our Newmarket station.
LISTNUM 1 \l 15361 This format was recently introduced to the Ottawa market as The Jewel. The essence of the format is to play the best soft melodic music from many eras with lyrics that might be meaningful and touch something within the listener relating to life experience, memories, lifestyle or simply feel good.
LISTNUM 1 \l 15362 Because we blend a variety of music genres from different eras, we are not in a time warp, nor do we sit still. We move from era to era. It is exciting to hear this variety: "Summer Wind" by Frank Sinatra from the '60s followed by a Barbra Streisand "The Way We Were" from the '70s, perhaps Toni Braxton from the '90s, "Cold Cold Heart" by Norah Jones from the era 2000, or in instrumental by Richard Abel or André Gagnon, and then a classic duet by Tony Bennett with Celine or K.D. Lang.
LISTNUM 1 \l 15363 Ninety percent of the music we will bring to Sudbury is not heard on existing stations. A list of artists that have not been heard in Sudbury in the last month is in your package.
LISTNUM 1 \l 15364 Of all the applicants before you, we have made the highest commitments to Canadian music and emerging artists. We will play 40 percent Canadian content at all times. As well, we will play 40 percent emerging artists, such as Susie Arioli, who sang, "I'll Never Smile Again; Michel Berube "Lotta Love"; Rick Sonata "Bewitched", or Carol Welsman's "Fever".
LISTNUM 1 \l 15365 These Canadian artists will be complemented by the great American songbook artists Carly Simon, Rod Stewart, Barry Manilow and Bette Midler, all of whom, as a world renowned performers, realized that they, like their audience, were progressively getting older and that their music tastes have changed and elevated to a softer melodic sound with meaningful lyrics.
LISTNUM 1 \l 15366 This is the reason our proposed format is ideal for Sudbury. Sudbury, just like these artists, and the aging baby‑boomer generation, has become older, as indicated by StatsCan and our research. It will continue to get older as the baby‑boomer bubble travels from the 50 age demo up to the 60 age demo and beyond.
LISTNUM 1 \l 15367 Every hour of the day will feature Canadian instrumental artists such as Richard Abel performing "Offenbach's Bacarolle" and new emerging instrumental artists Howard Lopez or Alan Burlon performing pop classics.
LISTNUM 1 \l 15368 We know that as radio stations narrowed their playlists to fit the more rigid youth formatting, instrumental music on radio saw a drastic decline in the mid to late '70s. Despite the decline in radio play, there is still a strong demand for instrumental music. Seventy‑nine percent of people we surveyed who said they would definitely listen to the Diamond also expressed an interest in the instrumental music.
LISTNUM 1 \l 15369 Instrumental musicians, they exist across the country in every village, every town, every city. They perform at private functions, at weddings, at Bar Mitzvahs, at concerts, in clubs and, in many cases including Sudbury, in symphony orchestras.
LISTNUM 1 \l 15370 Instrumental music is very much alive and yet, because it is being ignored by radio, it has been forced to operate as a cottage and basement industry. The artists produce, they market and sell their recordings themselves via the internet, flea markets, small concerts or through word‑of‑mouth.
LISTNUM 1 \l 15371 We cannot ignore a form of music that has existed for centuries. Surely, we cannot deny future generations the opportunity to hear instrumental music. Today our stations in Newmarket and Ottawa provide exposure for this music. We believe that, as our research points out, Sudbury would welcome this opportunity.
LISTNUM 1 \l 15372 Our instrumentals are uplifting. They are fresh and definitely foreground. They engage the listener, they invoke passion and emotion. A sample of a broad variety of instrument music could include a Strauss waltz performed by André Rieu, or "Penny Lane" performed by the Boston Pops. It could be emerging artists Jacques Duguay performing "My Elusive Dreams" or Paul Blissett performing "Annette".
LISTNUM 1 \l 15373 As an additional way to showcase new Canadian and instrumental talent, the Diamond will have features geared to that end. Paul Evanov will tell you more about those elements.
LISTNUM 1 \l 15374 MR. PAUL EVANOV: Two of our features have been put into our program schedule in order to highlight new Canadian artists. The "Canadian Spotlight" is an hour long show that will present the work of a new Canadian artists performing in the vocal or instrumental style. During the feature, the host will discuss the artist's background and other relevant facts that are of interest to the listener. Where possible, we will invite the artist into the studio for live one‑on‑one discussion. Naturally, we will also play a selection of works by that artist during the hour.
LISTNUM 1 \l 15375 The "Canadian Spotlight" segment is scheduled to play on Saturday afternoon. Mindful of the nature of shift work that accompanies the mining industry, we will re‑air the segment on Sunday mornings.
LISTNUM 1 \l 15376 The second feature focuses on instrumental talent. The "After Nine" program is designed to run in the evening and is meant to appeal to a listener who wants to sit back and relax to some soothing music. Although not exclusive to Canadian artists, this feature will draw on many of the artists who have signed on to our Catalogue of Canadian Instrumental Music, which Carmela will be addressing shortly.
LISTNUM 1 \l 15377 In brief, the catalogue provides a vehicle for instrumental musicians to get their work out, and the format we are proposing is a perfect fit for that type of music.
LISTNUM 1 \l 15378 We feel each of these features demonstrates that it is possible to have high quality programming that showcases new talent, while at the same time meets and exceeds minimum levels of Canadian Content requirements.
LISTNUM 1 \l 15379 I will pass things over to Wendy Gray to talk about other spoken word elements of our programming.
LISTNUM 1 \l 15380 MS GRAY: As is the case in many northern markets, local news and information scored very important to 67 percent of the people of Sudbury. Consequently, the newsroom at Diamond 88.5 will deliver an above average local component of 50 percent. Listeners will be able to access information about what is happening in and around the Greater Sudbury Area 20 times per day from Monday to Friday.
LISTNUM 1 \l 15381 The lifestyle in northern Ontario sees people travelling from one town to another, either to visit family or to take advantage of some event that may be happening in another northern community. Consequently, listeners want to know what there is to do in their region, as well as what is happening in the Greater Sudbury Area.
LISTNUM 1 \l 15382 To meet that need, we have scheduled a community calendar segment four times daily which will include events in Sudbury, but will also extend farther afield to areas such as Timmins and North Bay.
LISTNUM 1 \l 15383 Natural resources play an important role in the Sudbury market. Recognizing the importance of Inco and X‑Strata to the local community, and Tembec and Domtar to the Northern Ontario region, we will air a business report twice daily focusing on local, national and international business news.
LISTNUM 1 \l 15384 As people age, health issues become more and more important. Diamond 88.5 is targeting a more mature demographic and Sudbury is a Regional Health Centre for over 600,000 Northern Ontario residents seeking an acute, transitional, rehabilitation or cancer care. Haliburton Broadcasting is the only applicant with radio stations in the surrounding communities that depend on Sudbury for health services. Simply put, if you need cancer care, treatment for heart disease or mental health care in Elliot Lake, you will most likely be travelling to Sudbury for that care. And once in Sudbury, those same residents can depend on a familiar voice to deliver relevant health information once a day during the lunch hour.
LISTNUM 1 \l 15385 We feel strongly that both the musical and spoken word programming will appeal to our target demographic and that we will have a solid listenership as a result. Christopher Grossman will address how these numbers will impact on sales and the overall financial health of Diamond 88.5.
LISTNUM 1 \l 15386 MR. GROSSMAN: Due to a revived interest in natural resources, Sudbury has seen a population growth in recent years. Large companies such as Inco and X‑Strata have invested large sums of money in Northern Ontario. This new job creation in the resource sector is fuelling housing starts and other industries such as medicine. Because of this renewed investment, the net migration is on the increase as people who have left are returning to Sudbury.
LISTNUM 1 \l 15387 Overall, the Sudbury market is strong. Retail sales in Sudbury far outpace the rate of inflation. The radio PBIT in Sudbury has increased 60 percent since the year 2000. The total radio market is worth $10 million. We project that 75 percent of our revenue will come from new advertisers. We expect to bring disenfranchised advertisers who target the more mature consumer back to radio.
LISTNUM 1 \l 15388 Edward Jones Group, Belanger Design Studio in the Sudbury Symphony Orchestra have all told us that they would be interested in advertising on a station that delivers the 50‑plus demographic.
LISTNUM 1 \l 15389 The remaining 25 percent of our initial revenue will come from existing stations. The initial impact represents only 2 percent of the total market spend and we expect he will eventually be replaced as new advertisers expand their budget.
LISTNUM 1 \l 15390 As with all radio applications, we have allocated a portion of these revenues to be committed to Canadian Content Development.
LISTNUM 1 \l 15391 Carmela will tell you about some of the proposed CCD initiatives.
LISTNUM 1 \l 15392 MS LAURIGNANO: You will note from our application that our CCD plan far exceeds the direct minimum requirements imposed by the revised Commercial Radio Policy. We believe our CCD plan shows our commitment to developing Canadian content and talent.
LISTNUM 1 \l 15393 We are sensitive to the strong Francophone presence in Sudbury. I believe we are the only applicant to have dedicated over $10,000 per year to MUSICACTION in order to develop Francophone talent in the region.
LISTNUM 1 \l 15394 In addition to our commitment to MUSICACTION, we continue to be dedicated to the Catalogue of Canadian Instrumental Music. This initiative, worth close to $1 million was first approved by the Commission when we applied for our licence in Ottawa. Since that time, we have developed the web‑based site and have started to register members. We now have over 1,000 records in the database. The soft launch of the website is scheduled for mid‑April.
LISTNUM 1 \l 15395 We are also planning an advertising campaign, including print and internet‑based advertisements in trade magazines to begin in June. In the coming month, we will also be inviting existing members to add the balance of their work to the catalogue.
LISTNUM 1 \l 15396 We intend to make the database available to the film and television industry come the fall, so that they may source new and exciting instrumental music for their works.
LISTNUM 1 \l 15397 It is to these aspects of the catalogue that we are dedicating over $90,000 during the term of the licence.
LISTNUM 1 \l 15398 Given the strong number of aboriginal people in Northern Ontario, we have committed monies to two projects that will help to develop aboriginal talent. The first of these projects is at Laurentian University and the second is the Aboriginal Media Education Fund.
LISTNUM 1 \l 15399 Laurentian University runs a communications program which covers all areas of broadcasting, including broadcast journalism. As a requirement of the program, all students must take at least one course in aboriginal cultural studies. We have committed $5,000 per year to be given to the program over the seven years of the licence term.
LISTNUM 1 \l 15400 The Aboriginal Education Fund is an an initiative which has, as its mandate, to foster a talent pool that will create, produce, distribute, market and broadcast programming that is relevant in today's aboriginal society, both nationally and internationally. We have committed $10,000 per year over the seven years of the licence term to this initiative.
LISTNUM 1 \l 15401 Lastly, we have set aside $10,000 per year to promote Canadian talent at Canadian Music Week.
LISTNUM 1 \l 15402 Our total CCD package over the seven‑year licence term, in direct benefits alone, is $350,000.
LISTNUM 1 \l 15403 MR. GROSSMAN: As you have heard, there is a gap in the Sudbury market that needs to be filled. The 45‑plus demographic has stated they are unhappy with the radio service being provided to them. Diamond 88.5 will change that situation. With our blend of music from the last five decades as well as a combination of locals and instrumentals, our station will appeal to a more mature market and give them what they want. Not only will our listeners be happy with the end product, but advertisers will also benefit from today's Easy Listening format which delivers an upscale, more mature market.
LISTNUM 1 \l 15404 Let's review the key benefits of this application.
LISTNUM 1 \l 15405 Number one, this application is a strong marriage of two very experienced independent broadcasters who will bring editorial, ownership and format diversity to the Sudbury market.
LISTNUM 1 \l 15406 Diamond 88.5 will repatriate lost tuning in the older demographic, as we have seen in The Jewel in Ottawa.
LISTNUM 1 \l 15407 This format in Sudbury will see increases in total advertising spending as new advertisers tap into the mature audience we create.
LISTNUM 1 \l 15408 Through the synergies created, both Haliburton and ERG will continue to provide quality programming to the under served communities.
LISTNUM 1 \l 15409 And, finally, Haliburton will be able to strengthen its French network.
LISTNUM 1 \l 15410 Diamond 88.5 will inject $350,000 into CCD benefits that will deliver hundreds of new and emerging Canadian artists to the Sudbury airwaves over the term of the licence.
LISTNUM 1 \l 15411 Before we go to questions, we have one in brief housekeeping matter to address.
LISTNUM 1 \l 15412 Sean...?
LISTNUM 1 \l 15413 MR. MOREMAN: Yes. As a matter of housekeeping, in our most recent reply to deficiencies there was a small mathematical error. That error has been corrected and filed with the Secretary and does not impact on anything that was in the presentation.
LISTNUM 1 \l 15414 MR. GROSSMAN: Thank you.
LISTNUM 1 \l 15415 This concludes our presentation and we would be pleased to answer any questions that you may have.
LISTNUM 1 \l 15416 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 15417 Commissioner Cram...?
LISTNUM 1 \l 15418 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 15419 I will address my questions to you, Mr. Grossman, and you can direct them wherever you want.
LISTNUM 1 \l 15420 MR. GROSSMAN: All right.
LISTNUM 1 \l 15421 COMMISSIONER CRAM: I must say, this end of the table was getting very depressed when Mr. Evanov was talking about the fact that we are getting older.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15422 COMMISSIONER CRAM: I'm sort of having a hard time getting over the slight bit of depression caused by that thought.
LISTNUM 1 \l 15423 Anyway, you are targeting a 45‑plus audience you say, and I found it interesting in your talk, you talked about "upscale" older people just at the end.
LISTNUM 1 \l 15424 How do you know they are upscale?
LISTNUM 1 \l 15425 MR. GROSSMAN: We would be looking at sort of the general trends of inheritance, the larger shift of wealth ever seen, where parents are handing over their estates and fortunes to their children.
LISTNUM 1 \l 15426 I think is just a generally ‑‑ general sense that there is more material wealth available to an older ‑‑ the yuppie generation that there ever has been. I think we see that in the retail spends that are evident in Sudbury, as well as just common sense would prevail that there is money available, it is a more mature upscale audience than has been in the previous.
LISTNUM 1 \l 15427 COMMISSIONER CRAM: I thought they gave all her money to their kids.
LISTNUM 1 \l 15428 MR. GROSSMAN: They spend it first.
LISTNUM 1 \l 15429 COMMISSIONER CRAM: Your core audience would be?
LISTNUM 1 \l 15430 MR. GROSSMAN: It would be 55 to 64.
LISTNUM 1 \l 15431 COMMISSIONER CRAM: Who is your ‑‑ is it a Jack or a Diane and what age are they?
LISTNUM 1 \l 15432 MR. GROSSMAN: Paul, or Bill, do you want to dive into that?
LISTNUM 1 \l 15433 MR. BILL EVANOV: It would be slightly skewed female, maybe 55‑45 or 53‑47 percent, just slightly, nothing major.
LISTNUM 1 \l 15434 The age demo really would be ‑‑ between 55 and 60 would be your predominant age group.
LISTNUM 1 \l 15435 Our core, like our heavy core, would be 55‑64, with the bulk of that, even the larger portion, being 55‑60, which is what we have experienced in Ottawa and also we have experienced that in Newmarket.
LISTNUM 1 \l 15436 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15437 I thought it interesting at page 3 of your introduction today you are talking about:
"When we evaluated the market, we determined that the most popular demographic, the 18‑45 year olds, is well‑served by existing stations."
LISTNUM 1 \l 15438 You did your own evaluation of the market?
LISTNUM 1 \l 15439 Is that what I'm hearing?
LISTNUM 1 \l 15440 MR. GROSSMAN: Yes, we did. Yes.
LISTNUM 1 \l 15441 COMMISSIONER CRAM: And you didn't really look at satisfaction levels, you looked at the fact of who the formats were directed at.
LISTNUM 1 \l 15442 Is that correct?
LISTNUM 1 \l 15443 MR. GROSSMAN: That's correct.
LISTNUM 1 \l 15444 I will ask Sean to give you some background on the research that we did.
LISTNUM 1 \l 15445 MR. MOREMAN: That is correct.
LISTNUM 1 \l 15446 What we did was looked at what services existed in the market and who they self‑identified as marketing to and we said that there was a hole ‑‑ in our opinion, there was a hole at the top end of the demographic. We went in and did a satisfaction survey amongst the demographic that we ‑‑
LISTNUM 1 \l 15447 COMMISSIONER CRAM: The demographic you were proposing to direct yourself at.?
LISTNUM 1 \l 15448 MR. MOREMAN: That's correct.
LISTNUM 1 \l 15449 COMMISSIONER CRAM: Yes, all right.
LISTNUM 1 \l 15450 So I find it interesting Newcap here is aiming at that very demographic, the younger demographic, and younger still, and we have always been told that it is that demographic that is leaving radio.
LISTNUM 1 \l 15451 Now, at the end of my career with the CRTC, I find out that there is another demographic leading, the 45‑plus. Radio is in real trouble.
LISTNUM 1 \l 15452 You say you repatriated, can I say, the older listener, you think, in Ottawa and in Newmarket?
LISTNUM 1 \l 15453 MR. GROSSMAN: The ratings from S106 for the four rating periods over the launch of The Jewel, there was 31 percent increase in tuning 55‑plus than there was before The Jewel was on the air. That is evident in the BBM ratings in Ottawa.
LISTNUM 1 \l 15454 COMMISSIONER CRAM: Oh, in the BBM ratings. All right.
LISTNUM 1 \l 15455 MS LAURIGNANO: If I can add to that, just to clarify about the research and the tuning and the trends, you are correct, there is a lot of research in the public domain, some of which we have advanced and other applicants in the past, that shows that the two ends of the demographic are leaving radio, are not tuning in radio, or they are not tuning as often.
LISTNUM 1 \l 15456 Luckily for Sudbury, there has been an increase in tuning overall for radio. The research will bear that out. That is specifically true in the age demo.
LISTNUM 1 \l 15457 So while the tuning is up overall, it is significantly lower in the higher end of the demographics, which is one of the things that we looked at and we analyzed about what format could possibly be feasible there. That was just like an initial step, because had we gotten back some results that this format was not feasible we would have gone and found a format, fine, but it just happened that it confirmed all that.
LISTNUM 1 \l 15458 So it is true that that trend has been going on.
LISTNUM 1 \l 15459 In Sudbury it is a different situation right now and, as I say, luckily for us because, as you know, we are crusaders for the young demographics where we have actually come up with a YCR format that we are trying to advance across the country. That tuning is way up in Sudbury, which is great.
LISTNUM 1 \l 15460 The other thing I think that supports our argument that the need is in the older demo, you will see by the number of applicants that four out of the six really have identified the top end of the market as having the greatest need.
LISTNUM 1 \l 15461 So I just wanted to add that in.
LISTNUM 1 \l 15462 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 15463 I take it, though, that because Ottawa and Newmarket you have more competition, or you would have more competition, in Sudbury you are going to add more newer music.
LISTNUM 1 \l 15464 Is that the concept?
LISTNUM 1 \l 15465 MR. BILL EVANOV: It would be somewhat similar. There might be ‑‑ well, there would be more newer music now that were getting into the emerging artist percentages that we are committing to. In that respect there would be more newer music ‑‑ I'm having problems with the alliteration this morning, excuse me ‑‑ if that's the question your asking.
LISTNUM 1 \l 15466 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 15467 MR. BILL EVANOV: But other than that, the formats would be very, very similar in nature. When you say "newer music" that doesn't mean you are putting on rock music and targeting younger, it just means you are putting in newer, more melodic, easy‑to‑listen‑to‑type music that the 45‑plus age demo might enjoy.
LISTNUM 1 \l 15468 COMMISSIONER CRAM: You talked a fair bit about instrumental this morning and it seems you are looking at about 20, 25 percent of instrumental?
LISTNUM 1 \l 15469 MR. BILL EVANOV: Yes, we are looking at 25 percent instrumental.
LISTNUM 1 \l 15470 COMMISSIONER CRAM: How much would be Category 3?
LISTNUM 1 \l 15471 MR. BILL EVANOV: Of the overall music or of the instrumental?
LISTNUM 1 \l 15472 COMMISSIONER CRAM: Of the instrumental.
LISTNUM 1 \l 15473 MR. BILL EVANOV: It would be around 3 percent.
LISTNUM 1 \l 15474 COMMISSIONER CRAM: All right. Three to 5, I think you said.
LISTNUM 1 \l 15475 MR. BILL EVANOV: Three to 5 is the overall, yes.
LISTNUM 1 \l 15476 COMMISSIONER CRAM: I noticed classics. You were talking about a couple of classics that I was fascinated by.
LISTNUM 1 \l 15477 Are the instrumentals part of the programming or are they day‑parted?
LISTNUM 1 \l 15478 MR. BILL EVANOV: Here is what you will hear in a day.
LISTNUM 1 \l 15479 In morning drive there might be limited instrumental because it is a morning drive program, it is very, very different, and there might be one an hour. It depends on the programmer in that area.
LISTNUM 1 \l 15480 From 9 o'clock on there would be at least two per hour. What we found is, two per hour mixed in with the other genres of music that we are doing from different eras fits in beautifully and there is a real nice mix to it. We have experimented with this for a long time.
LISTNUM 1 \l 15481 So throughout the day you are going to hear perhaps 20 different instrumentals, okay, throughout your day‑part.
LISTNUM 1 \l 15482 Then, in the evening, we will come to a specialty program of instrumental music where I think we are playing about 39 selections, 38 selections, could be 40 depending on whatever. That is more of a specialized program. That is why we have that particular block.
LISTNUM 1 \l 15483 The other reason for it is that you can take 1,000 tracks of instrumental music and there is some you cannot play in the daytime. They are perhaps very slow, they will bring your program to a halt. So those are day‑parted to the evening time period and the ones that are perhaps a little bit more lively would be day‑parted to the earlier part of the day.
LISTNUM 1 \l 15484 I just want to go back very quickly.
LISTNUM 1 \l 15485 When we began this format years ago in Newmarket we didn't play any instrumental music, unless maybe it was a hit by a Herb Alpert or a Percy Faith or something that just came up once in awhile, "Summer Place" or whatever.
LISTNUM 1 \l 15486 Then we started to get phone calls from many, many people, okay, because we thought, like everybody else, instrumental music was dead. Then we got the shock all of our lives, because phone calls and e‑mails would come in and say "Listen, you know, you may not play it, but there is a school here that has a class of 300 kids playing instrumental music, there is another school there that has a class of 40 kids playing instrumental music and there is a lot of people that play instrumental music so why don't you put it on the air?" So we did.
LISTNUM 1 \l 15487 We started inviting people to send us their own home‑made, basement‑made CDs as well. Then we started adding more and more, but we couldn't add ‑‑ then we had to make a decision and experiment with the programming where could we put it. So in terms of day‑parting, we put some in the day, some in the evening, and a lot of people really wanted ‑‑ there was a real demand from a lot of people that really were interested only in instrumental music, so we created an evening block of a couple of hours specifically for them and anybody else to enjoy.
LISTNUM 1 \l 15488 If you are reading a book, if you have a nice evening to enjoy something, it is beautiful music to listen to. So for that reason we have had a great response.
LISTNUM 1 \l 15489 We believe if there are stations across the country playing this music, instrumental music will come back. But if radio doesn't take the lead and play it and give it the exposure, it is going to remain in the basements.
LISTNUM 1 \l 15490 But it will never go away. It has been around since the days of Strauss and Beethoven. It is not leaving, it is here to stay and we are going to play it.
LISTNUM 1 \l 15491 In terms of the classical, we are not a classical music station, but we will play some light classics. You know, we will play the waltzes, we even play tangos, and it is mixed in with a lot of the pop classics. So it has a very exciting sound to it.
LISTNUM 1 \l 15492 That is what I can tell you about that.
LISTNUM 1 \l 15493 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 15494 MR. BILL EVANOV: Oh, Carmela? Sorry.
LISTNUM 1 \l 15495 MS LAURIGNANO: I just have something to add.
LISTNUM 1 \l 15496 The way that the programming is formatted is also supported by our research. What the research found is that there is a core of people who really like instrumental music. It is not surprising, because those of us who grew up and who lived prior to the '90s ‑‑ exactly ‑‑
LISTNUM 1 \l 15497 COMMISSIONER CRAM: Playing the piano.
LISTNUM 1 \l 15498 MS LAURIGNANO: ‑‑ if you look at charts, instrumental music used to chart as well as vocals. I mean, it was part of every station's radio mix that, you know, you would have top 40 hits that were instrumental.
LISTNUM 1 \l 15499 So this music is very, very familiar to people. They know it and it is like "Holy smokes, I haven't heard that in a while". So it is both familiar in terms of having lived with it, it is familiar sometimes because it is cover versions of popular, familiar music. So there is a hard core for that. Those people are going to be extremely satisfied in those three hours of solid programming in the evening.
LISTNUM 1 \l 15500 What the research also found is that there are a number of people who said "Ah, I don't know about instrumental music. It's not really my favourite thing". But when we played them a sample ‑‑ which we did, we actually blended an instrumental music ‑‑ the numbers shot up like crazy about how likely they would be to listen they liked it so much when it was blended.
LISTNUM 1 \l 15501 So we have really taken those two, you know, findings and put them and translated them into the programming. That is why it is blended in the day time, sometimes two or three an hour depending on the day parts and what kind of blend we are going to do to the solid stuff.
LISTNUM 1 \l 15502 We think, too, that during the daytime when people come to realize and appreciate those tunes and that kind of music and get to like it ‑‑ which we know they will ‑‑ then they will have the opportunity to get their real fill of it, which is later on, and we will promote it as such that they can go on the evening and listen to that particular block.
LISTNUM 1 \l 15503 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 15504 So how is this format going to be different from the format of Joco or Wrightsell?
LISTNUM 1 \l 15505 MR. BILL EVANOV: If we look at Joco, we are trying to understand the format. I'm not being critical, I don't understand it fully. But from what we heard, it is an Oldies format which tells me that it is maybe a lot of rock and roll oldies, which we are not. We are more ‑‑ we are a soft melodic ballad sound, romantic songs or wherever.
LISTNUM 1 \l 15506 They have made no major commitment of any kind to instrumental music. They may play the odd one, but we will play 25 percent.
LISTNUM 1 \l 15507 For us it is a major source also of emerging artists.
LISTNUM 1 \l 15508 They don't believe in the internet. We believe in the internet and we believe that older people like ourselves, or even people 10 years older than us, are using the internet. What we have found, even in Ottawa, that we are getting e‑mails ‑‑ from Gatineau and Ottawa, e‑mails from people that are probably in their late 70s how much they enjoy the music, or their early 70s.
LISTNUM 1 \l 15509 We use it as a marketing tool. Our programming is available there, information is available, contests are available, so we think it is an excellent tool for the radio station and it knows no age barriers. I think if there is an interest people will learn it. It can be very basic as e‑mails or just listen in online.
LISTNUM 1 \l 15510 I think their commitment to emerging artists was 10 percent and our commitment is 16 percent over the week. In other words, we have 40 percent of the 40 percent Canadian, which works out to 16 percent. So ours is higher there.
LISTNUM 1 \l 15511 I believe our CTD commitment is higher.
LISTNUM 1 \l 15512 COMMISSIONER CRAM: I'm just talking about programming.
LISTNUM 1 \l 15513 MR. BILL EVANOV: Yes, I'm sorry.
LISTNUM 1 \l 15514 COMMISSIONER CRAM: So Mr. Wrightsell's proposal?
LISTNUM 1 \l 15515 MR. BILL EVANOV: Yes.
LISTNUM 1 \l 15516 Their medium age is 42 or 43 which really sort of made me sit up and wonder if they were targeting the right group. If they do, that is a greater impact in the market in the stations that are currently there. Where ours is up into the mid to late 50s so our impact will be less in the market.
LISTNUM 1 \l 15517 I believe their emerging was 15 percent of the 40 which is 6 percent. Again ours was 16. I believe also that they had no real instrumental down on their list in terms of instrumentals where we have a firm commitment and we believe in that.
LISTNUM 1 \l 15518 Also, from what I gathered, there was no spoken word features that were defined, whereas we have 40 scheduled features per week. This is not counting news.
LISTNUM 1 \l 15519 So I think we bring a proven format, a working model and a very large library to the table in terms of producing this type of music.
LISTNUM 1 \l 15520 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15521 Moving on to spoken word, what is the total amount of structured spoken word?
LISTNUM 1 \l 15522 MR. GROSSMAN: Paul, I will ask you to answer.
LISTNUM 1 \l 15523 MR. PAUL EVANOV: All right. To break it down, along with ‑‑ you know, music is a huge part of this radio station, but obviously spoken word is obviously very important within that. As the research indicated as well, there is a high interest in surveillance, weather, traffic, news and information. So we have incorporated that in our entire program schedule.
LISTNUM 1 \l 15524 So with features and news, we have news and news updates, which Wendy can elaborate on, we have 189 minutes per week for news and news updates alone. We also have traffic reports, which add up to about 176 minutes per week. Our combined features, community calendar, business report, health watch and book of the week equals about 56 minutes per week. We have the Canadian Spotlight specialty show which runs twice, which is two hours there. Mixed within that as well, those features on their own, we also have announcer talk, rolling talk between the announcers.
LISTNUM 1 \l 15525 COMMISSIONER CRAM: The question was: How many hours of structured program spoken word?
LISTNUM 1 \l 15526 MR. PAUL EVANOV: Structured excluding commercials, we have 995 minutes, 16.5 hours, which would equal up to 13 percent per week of spoken word.
LISTNUM 1 \l 15527 COMMISSIONER CRAM: You are looking at something that I think has it all spread out very easily.
LISTNUM 1 \l 15528 Could you provide that to us so we could use it for comparison.
LISTNUM 1 \l 15529 MR. PAUL EVANOV: I definitely could. I will clean it up from my notes and submit it.
LISTNUM 1 \l 15530 COMMISSIONER CRAM: That would be great.
LISTNUM 1 \l 15531 The unstructured spoken word, how much are you planning?
LISTNUM 1 \l 15532 MR. PAUL EVANOV: Unstructured in regards to announcer talk?
LISTNUM 1 \l 15533 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 15534 MR. PAUL EVANOV: Announcer talk on average, on average 8 to 10 minutes per hour. Some hours we will have a little bit less. Obviously there will be more emphasis in the morning show, a little bit less in the midday. Some features such as the Canadian Spotlight, if we have a Canadian artist in or a few artists in there will be a little more talk in that hour. Some weeks there might not be any artists, there will be a little bit less, but on average 8 to 10 minutes of announcer talk, which will include, you know, regular surveillance and information and updates.
LISTNUM 1 \l 15535 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15536 MR. PAUL EVANOV: As well as information on artists and the music that we are playing.
LISTNUM 1 \l 15537 COMMISSIONER CRAM: How many new staff are you planning on hiring?
LISTNUM 1 \l 15538 MR. PAUL EVANOV: I will have Wendy address our news department.
LISTNUM 1 \l 15539 MS GRAY: We plan to have one full‑time news anchor/news director who will either do the morning or the afternoon news shift. We will have two part‑time employees in the newsroom, one again either doing the morning shift. As well, those two will split the reporting duties within the city, and we plan on utilizing three to four interns from Laurentian University or Cambrian College to do some follow‑up on press releases as well as going out to press conferences, city council meetings, that sort of thing, to provide them an opportunity to learn in a working newsroom.
LISTNUM 1 \l 15540 COMMISSIONER CRAM: When you say "part‑time" do you mean half time?
LISTNUM 1 \l 15541 MS GRAY: Part time would be 25 to 30 hours.
LISTNUM 1 \l 15542 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15543 The number of programming staff?
LISTNUM 1 \l 15544 MS GRAY: I'm going to let Paul speak to that.
LISTNUM 1 \l 15545 MR. PAUL EVANOV: Sorry to jump around here.
LISTNUM 1 \l 15546 In total we have eight full‑time programming staff and three part‑time, which consists of obviously program director, as Wendy stated, our news staff there. We also have ‑‑ we are live all day from 6:00 a.m. to midnight with the morning show, live morning show, live midday, live drive home and live evening show, along with two swing announcers as well to cover off some weekend shifts and to fill in where needed, and also a production and creative director for the station and the programming department, on top of the news department that Wendy just spoke to.
LISTNUM 1 \l 15547 COMMISSIONER CRAM: So the eight programming and then, in addition, the news, the two essentially FTEs.
LISTNUM 1 \l 15548 You have answered my other question, you are going to be live‑to‑air during the full broadcast week?
LISTNUM 1 \l 15549 MR. PAUL EVANOV: Yes, we are, from 6:00 a.m. to midnight and there will be a bit of voicetracking over night.
LISTNUM 1 \l 15550 COMMISSIONER CRAM: Yes, midnight to 6:00 a.m., yes.
LISTNUM 1 \l 15551 MR. PAUL EVANOV: Yes.
LISTNUM 1 \l 15552 COMMISSIONER CRAM: You said in your letter of January 9, that there would be a minimum of 100 hours of local programming.
LISTNUM 1 \l 15553 Are you going to be moving some programming from your other stations or how is that going to work?
LISTNUM 1 \l 15554 MR. GROSSMAN: I will ask Paul to talk to that.
LISTNUM 1 \l 15555 MR. PAUL EVANOV: Yes. Out of 126 minimum 100 will be local. As again some of our features, the Canadian Spotlight, we will be gathering some ‑‑ we want to utilize the resources of our other radio stations so there will be some information coming from perhaps Newmarket or perhaps Ottawa in order to spotlight some of the Canadian artists in those cities or different areas.
LISTNUM 1 \l 15556 So those might be in some of the Canadian Spotlight which would perhaps count as local, but a minimum 100 hours would be local to the Sudbury ‑‑ you know, from the Sudbury radio station.
LISTNUM 1 \l 15557 COMMISSIONER CRAM: So potentially 26 hours and that would be ‑‑ it sounds like primarily spoken word programming would come from elsewhere?
LISTNUM 1 \l 15558 MR. GROSSMAN: Yes. Like some of the feature programming. If we could utilize the resources in the other stations, that would be included there.
LISTNUM 1 \l 15559 MR. BILL EVANOV: I'm sorry, the 100 hours is minimum.
LISTNUM 1 \l 15560 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 15561 MR. BILL EVANOV: We just wanted some flexibility because we didn't know what we necessarily might produce. It may end up that we might be 120 hours of live programming originating from Sudbury. So we wanted a little bit of flexibility. Seven years is a long time and things will come up, but definitely not John Tesh.
LISTNUM 1 \l 15562 COMMISSIONER CRAM: Programming synergies then, there would be some programming synergies with your stations, Mr. Evanov.
LISTNUM 1 \l 15563 Would there be any programming synergies with any other of your Haliburton stations, Mr. Grossman?
LISTNUM 1 \l 15564 MR. GROSSMAN: I think the predominance would be with Bill's stations in Newmarket and Ottawa.
LISTNUM 1 \l 15565 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15566 MR. GROSSMAN: For programming, that is.
LISTNUM 1 \l 15567 COMMISSIONER CRAM: Yes. That's right.
LISTNUM 1 \l 15568 MR. BILL EVANOV: In terms of music. But each station will have its own music director, okay, who will decide on the actual final mix in terms of, for example, if Sudbury is an older market he may spin certain records a bit more than we would in Ottawa. He would be in direct contact with local Canadian talent in that area that he may want to give airplay to.
LISTNUM 1 \l 15569 So although the library and the philosophy of the program is the same, it is the local music director that will have a hands‑on with that format.
LISTNUM 1 \l 15570 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15571 As you said, 16 percent overall to emerging artists.
LISTNUM 1 \l 15572 The definition is what I need to know. How do you define "emerging artists"?
LISTNUM 1 \l 15573 MR. GROSSMAN: Carmela, do you want to tackle that?
LISTNUM 1 \l 15574 MS LAURIGNANO: I think so.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15575 MS LAURIGNANO: We have defined "emerging artists" as artists who have not sold 50,000 units or have not been certified. Artists who have not made it to any of the recognized charts such as top 40 or BDS or Mediabase, or artists who have made those charts but have been on it for less than a year.
LISTNUM 1 \l 15576 COMMISSIONER CRAM: Help me, is that different from the CAB?
LISTNUM 1 \l 15577 MS LAURIGNANO: It is very much similar to the CAB. I'm not sure if it's exactly the same, but it is similar to the CAB.
LISTNUM 1 \l 15578 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15579 You had that, I think, in one of your letters, your definition.
LISTNUM 1 \l 15580 MS LAURIGNANO: Yes, we do. That is in our ‑‑
LISTNUM 1 \l 15581 COMMISSIONER CRAM: I have it, your letter of January 9th.
LISTNUM 1 \l 15582 MS LAURIGNANO: January 9th, right. The second one.
LISTNUM 1 \l 15583 COMMISSIONER CRAM: All right.
LISTNUM 1 \l 15584 In your revenue you project getting 25 percent from existing radios. How did you ascertain that?
LISTNUM 1 \l 15585 MR. GROSSMAN: It is a combination of looking at the BBM ratings, our experience in the northern markets, Bill's experience in Ottawa and in Newmarket and sort of looking at the mix. We have feet on the street in Sudbury and get a sense of what really can practically happen in that market. So we are pretty confident based on their experience and our experience that that is accurate.
LISTNUM 1 \l 15586 COMMISSIONER CRAM: You are also optimistic about your growth. You have 7.5 percent, 7, 5, 5, 4, 4.
LISTNUM 1 \l 15587 MR. GROSSMAN: I will ask Carmela to speak to that issue.
LISTNUM 1 \l 15588 MS LAURIGNANO: Yes, we are very confident. In fact, we are the one applicant who has the best projections in terms of revenues over the seven years.
LISTNUM 1 \l 15589 It is something that comes from a formula that we are familiar with. It is not just based on BBM numbers and expecting a share of the market to be translated into revenue, because we traditionally do better. We outperform those shares.
LISTNUM 1 \l 15590 Also, we are looking for this market at a source of advertisers who are not traditional advertisers for the most part, some who have been wanting this market but who have been unable to reach it because of inefficiencies in the buy.
LISTNUM 1 \l 15591 I mean, if you are looking at the Sudbury market right now to reach the 50‑plus, you have to buy an AM station where the programming is a bit of a hybrid thing and the actual audience is not that great for that radio station, or you have to buy Easy Rock which attracts a certain percentage of those people 50‑plus, but you have to pay the rate to reach the whole universe. So it is not very economical for an advertiser who wants to reach his market to have to buy 1,000 listeners to reach 500 car buyers.
LISTNUM 1 \l 15592 You know, it's the old thing, if you are an advertiser would you rather buy a station that has a million listeners, or would you rather buy a station that has 500 car buyers. Well, I mean the answer is the 500 car buyers and the analogy here is the same.
LISTNUM 1 \l 15593 So there is a very large number of advertisers who want to reach this market, who have been spending money by the way, but it is not to radio. I mean there are billboards, there are bus boards, there is internet, there is print. As we know, there are huge amounts going to print and to, you know, standing at the street corner and signs and all kinds of other efforts, and our experience, you know, radio is cost‑effective and it is broadcasting so you reach a large number of people.
LISTNUM 1 \l 15594 So we are very, very confident and we have, I think, the experience and the record that we can do that. Part of this whole thing about putting the business plan together was that we did speak with advertisers, and not just in this market but, as you know now, we did it in Ottawa and we did it in Kamloops and we did it in, you know, Calgary. While the geography is different, you know, the desirability of the group and the lifestyle and demographic and that appeal is pretty much across the country.
LISTNUM 1 \l 15595 So we know that we can bring new revenue to broadcasting and I think that is one of the great benefits that we can bring to the system with the licensing of this station.
LISTNUM 1 \l 15596 MR. BILL EVANOV: May I add one thing?
LISTNUM 1 \l 15597 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 15598 MR. BILL EVANOV: It is just based on the experience of our Newmarket station.
LISTNUM 1 \l 15599 That is probably one of the toughest radio stations to sell and that is why for the 14 years before we bought it it lost big money each and every year, because it has a signal that is confined and it is in the middle of the Toronto CMA and it is very hard to sell.
LISTNUM 1 \l 15600 But today 70 percent of the advertisers on that station are brand new to radio. In other words, they were taken from elsewhere and brought to radio. Seventy percent. That is a very high percentage.
LISTNUM 1 \l 15601 The station was forced to do that because they went after the regular advertisers and couldn't get them because they didn't have the numbers or the signal, so I said "Okay, let's go after everybody on the street and let's find out. Let's bring people to radio". And that's what it did. I took people away from print, I took some billboard people away and I took some people that just didn't believe in advertising and brought them to radio. But 70 percent of the clients on that radio station are new to the broadcast business ‑‑ radio.
LISTNUM 1 \l 15602 COMMISSIONER CRAM: Mr. Grossman, moving on, because you are in the market, what would you say the impact of the ending of the LSA is?
LISTNUM 1 \l 15603 MR. GROSSMAN: I talk from personal experience in Timmins where we were fortunate enough to be in an LSA and what we have seen in that market is that since it has split up there is a dramatic increase in our sales in Timmins with basically flat rating.
LISTNUM 1 \l 15604 To answer your question about Sudbury, I think when you have more people in the field asking for business you are going to get more business. The reality is, I think that Newcap has to have more people in the field than they did in the past and I think it is going to have a positive impact for the market.
LISTNUM 1 \l 15605 COMMISSIONER CRAM: Mr. Grossman I want to talk to you about your strategy.
LISTNUM 1 \l 15606 MR. GROSSMAN: All right.
LISTNUM 1 \l 15607 COMMISSIONER CRAM: You said today at page 2 that:
"Our French station in Sudbury is really the driving force behind the remainder of the Haliburton French cluster. The synergies offered ..."
LISTNUM 1 \l 15608 Again, at the end you talked about
"... Haliburton will be able to strengthen its French network."
LISTNUM 1 \l 15609 But you had a station in the market in 1999.
LISTNUM 1 \l 15610 MR. GROSSMAN: Right.
LISTNUM 1 \l 15611 You know, I can only suggest to you that, you know, I think we are the largest small‑market Northern Ontario broadcaster and it was probably one of the most difficult decisions I had to make. It's all on the public record. The money that we got from the station was reinvested and then millions more in more stations in Northern Ontario.
LISTNUM 1 \l 15612 If I could do it again, I would never have sold that station. It was probably one of the biggest tactical mistakes I have made.
LISTNUM 1 \l 15613 But I think that what it taught me was what it is going to take for you licensing a station in Sudbury right now.
LISTNUM 1 \l 15614 The reality is, we need to get back in there. It is crucial to the Northern stations that we have. The reality is that, you know, we have launched a station in North Bay up against Rogers. I know what it takes to be successful in that market where we have had some great success competing with them.
LISTNUM 1 \l 15615 You know, I ask you to consider what I feel from my heart is that I wish I could have gone back ‑‑ and Bob Templeton was very convincing, and I wish I had talked to Gary Slaight a month before I talked to Bob Templeton. In hindsight it was a major error that I want to undo.
LISTNUM 1 \l 15616 I want you to give me a licence in Sudbury again because, I tell you, we will compete effectively against Rogers and I believe our application is stronger with Bill, and you see the passion and what they talk about with the format, it is a marriage made in heaven. Two strong independents that really, really can compete effectively. I think we are the only ones that can really go up against Rogers effectively, and I'm sure Newcap as well.
LISTNUM 1 \l 15617 COMMISSIONER CRAM: So your tactical error was ‑‑
LISTNUM 1 \l 15618 MR. GROSSMAN: Selling it.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15619 COMMISSIONER CRAM: Yes. Was it because you were ‑‑
LISTNUM 1 \l 15620 MR. GROSSMAN: We at the time, I'm sure ‑‑ and again it's on public record ‑‑ we bought five AM stations from ‑‑ we are in the business of buying distressed properties, stations that are under performing in Northern Ontario and made quite a good business of it, but at the time we went to Pierre Morrisette and I bought five AM stations and converted four of them in a row. I wish I had reversed the order and done Sudbury first, but we had tower issues in Sudbury. We had a difficult time getting an agreement with Telemedia at the time to use the combiner there.
LISTNUM 1 \l 15621 We were basically put in a jam where I had to make a decision where we had a cottage country station in Perry Sound that was in the market for sale and we had to consolidate our strength in the cottage markets in Muskoka for the Toronto market. It is the core of our business and I just couldn't let that opportunity go at the time. I fully disclosed it to the Commission and I can't impress upon you enough, we have to get back into Sudbury. I wish I had never sold the station in the first place.
LISTNUM 1 \l 15622 COMMISSIONER CRAM: Yes. You are still continuing your business of buying distressed radios?
LISTNUM 1 \l 15623 MR. GROSSMAN: Right. As you know, we have a couple before the Commission right now of stations that are in distress and, you know, we make a business out of it. We can go in and rationalize the business, use the synergies that we have in our company, and we feel very confident that there is a good, solid future in Northern Ontario and, now that Standard is for sale, we are going to be able to expand that to Southern Ontario.
LISTNUM 1 \l 15624 COMMISSIONER CRAM: Yes. I look at your map and in terms of English licences Sudbury would be at the end, so strategically if you had to let it go again you could, probably. Right?
LISTNUM 1 \l 15625 MR. GROSSMAN: No, it's not. Again it talks to the issues that Paul was talking about. It is the regional centre for the North.
LISTNUM 1 \l 15626 If you go to Berrydown and look up the hill, they have Cosco there. Our customers, our advertisers, our listeners in Elliot Lake, Iroquois Falls, Cochrane, Timmins, Kapuskasing, Hearst go and shop in Sudbury. It is the regional health centre for people in those areas. If you have cancer, you have to go to Sudbury to get treated.
LISTNUM 1 \l 15627 The reality is it's the centre. That's why retail sales are up. You talked about the disposable income being down, retail sales are up. It's because people are migrating to shop in those markets because of the choices that they had that they have built in Berrydown, which is a regional. You have large retailers doing lots of volume in the market.
LISTNUM 1 \l 15628 COMMISSIONER CRAM: All right. Thank You. Thank you very much, gentlemen.
LISTNUM 1 \l 15629 MR. BILL EVANOV: Can I add something, because we are part of the applicant.
LISTNUM 1 \l 15630 COMMISSIONER CRAM: Yes.
LISTNUM 1 \l 15631 MR. BILL EVANOV: We are in this for the long haul. The Evanov Radio Group has never sold a radio station. We have competed against the biggest odds in Toronto. When we were a CHR we had to take on Rogers plus three Corus stations that came right at us with the identical format. We stood our ground. We were the weak sister, the independent but we prevailed. They ended up flipping formats and changing.
LISTNUM 1 \l 15632 We are in Sudbury forever. In other words, if we are lucky enough to get this licence we are there. I know Mr. Grossman is committed. His commitment goes even beyond our commitment in terms of that this station will support the French network, because without this station that is very tenable. There are not big profits there and I'm sure the Commission knows that.
LISTNUM 1 \l 15633 But basically our stations together there are a powerful base for that French network, as well as operating ourselves. But we have no intention of selling Sudbury no matter what.
LISTNUM 1 \l 15634 COMMISSIONER CRAM: I believe you, Mr. Evanov. There is always the possibility of a share transfer though, isn't there.
LISTNUM 1 \l 15635 MR. GROSSMAN: I want to just add to that and I don't want to belabour it.
LISTNUM 1 \l 15636 COMMISSIONER CRAM: Yes...?
LISTNUM 1 \l 15637 MR. GROSSMAN: But the reality is, when I thought about doing this, you know, I looked at some of the other decisions. When the Calgary decision came down I was ecstatic that somebody that sold a station could get back into it again. I realized in my own sense that I had to get back in there. I had to find a partner that, you know, could make this argument strong. I had to make sure that we had the financial resources, which we do finally, to compete.
LISTNUM 1 \l 15638 And I know what it takes. I am the only applicant here today that has competed with Rogers on a one‑on‑one level as a Northern Ontario operator, not just one station or two. I know what it takes, both to compete with them in ratings and BBM, and our share in North Bay is a slam dunk.
LISTNUM 1 \l 15639 But they are fierce competitors, believe me. Strong, you know, very strong competitors. I say that with the utmost respect.
LISTNUM 1 \l 15640 COMMISSIONER CRAM: Thank you.
LISTNUM 1 \l 15641 Madam Chair...?
LISTNUM 1 \l 15642 THE CHAIRPERSON: Vice Chairman Arpin.
LISTNUM 1 \l 15643 COMMISSIONER ARPIN: Thank you, Madam Chair.
LISTNUM 1 \l 15644 I only have one question and it is the same one that I have asked everyone that has appeared before us today and yesterday.
LISTNUM 1 \l 15645 How many stations do you think the Sudbury market could support, taking for granted you are one of them?
LISTNUM 1 \l 15646 Also, which of the applicants should we not be licensing because it will have a negative impact on your business plan and which one do you think is not competing really for the same demographic ‑‑ or is not in the same market that you are planning to go?
LISTNUM 1 \l 15647 MR. GROSSMAN: I think that we would one licence to be granted and that would be us. If you did grant a second licence, we would hope that it is demographically as far away from us as possible.
LISTNUM 1 \l 15648 COMMISSIONER ARPIN: Thank you very much.
LISTNUM 1 \l 15649 Madam Chair...?
LISTNUM 1 \l 15650 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15651 Commissioner del Val...?
LISTNUM 1 \l 15652 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15653 Just one question for clarification.
LISTNUM 1 \l 15654 Your "After Nine" program, is that all instrumental or ‑‑
LISTNUM 1 \l 15655 MR. BILL EVANOV: It is instrumental with talk, but there are no vocals.
LISTNUM 1 \l 15656 COMMISSIONER del VAL: Thank you.
LISTNUM 1 \l 15657 Thank you, Madam Chair.
LISTNUM 1 \l 15658 THE CHAIRPERSON: Legal counsel...?
LISTNUM 1 \l 15659 MS DIONNE: Hello.
LISTNUM 1 \l 15660 MR. BILL EVANOV: Could I just make a reference to one of the handouts we gave you?
LISTNUM 1 \l 15661 I think we gave you a handout that said "Canadian Artists Not Heard in Sudbury", and another one "World Class Artists Not Played in Sudbury". There are a few at the bottom that are asterisk and we didn't quite explain the asterisked and we didn't quite explain the asterisk and I would like to explain that to you now, just very quickly.
LISTNUM 1 \l 15662 We looked at a month and those asterisks would indicate, for example, that perhaps that one artist had one song played.
LISTNUM 1 \l 15663 The example I'm going to give you is Bette Midler. The station in town played probably her biggest hit, which was "Wind Beneath My Wings". They played it one time, okay. We play 10 Bette Midler songs.
LISTNUM 1 \l 15664 If you take Barry Manilow, they played one Barry Manilow; we play 39 Barry Manilow songs, different songs.
LISTNUM 1 \l 15665 It's the same thing with K.D. Lang, we play 13 songs, they play "Constant Craving".
LISTNUM 1 \l 15666 I guess we go deeper into the repertoire of each artist to play in more of their selections. So even though they are on there, we asterisked them because there was one song that was played, that's all. We didn't want to hide that, so that's why does our asterisked.
LISTNUM 1 \l 15667 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15668 Legal counsel...?
LISTNUM 1 \l 15669 COMMISSIONER ARPIN: Now that you are drawing our attention to your two charts, I want only for the record to say that I'm not related to John Arpin at least.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15670 COMMISSIONER ARPIN: I know that he is a pianist because I have a few records from him. I have bought them only because it was carrying my name, but they are good.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15671 COMMISSIONER ARPIN: I have one where he plays Scott Joplin music. So he is not related. I never met him. I don't know who he is.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15672 MR. BILL EVANOV: We should invite you to Penetanguishene, because that is where he is from.
LISTNUM 1 \l 15673 MS GREY: It's his loss, by the way.
LISTNUM 1 \l 15674 COMMISSIONER ARPIN: It's his loss.
LISTNUM 1 \l 15675 MS LAURIGNANO: It's actually his stage name.
LISTNUM 1 \l 15676 MR. BILL EVANOV: And you do look a lot younger than him, too.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15677 MS DIONNE: I would like to get your comments on the possibility of the Commission imposing a condition of your licence requiring at least 20 percent of your weekly music broadcast to instrumental music.
LISTNUM 1 \l 15678 MR. BILL EVANOV: Could you repeat that? I just didn't hear it.
LISTNUM 1 \l 15679 MS LAURIGNANO: At least 20 percent instrumental music for the week.
LISTNUM 1 \l 15680 MR. BILL EVANOV: At least 20 percent instrumental, yes.
LISTNUM 1 \l 15681 MS DIONNE: Yes. So you would agree with ‑‑
LISTNUM 1 \l 15682 MR. PAUL EVANOV: Yes, we would.
LISTNUM 1 \l 15683 MS DIONNE: You have agreed to provide a schedule break down of structured spoken word programming.
LISTNUM 1 \l 15684 Do you have it with you today?
LISTNUM 1 \l 15685 MR. PAUL EVANOV: Yes, we do. It has a few notes. We will have it to you just after the lunch break, if that's okay.
LISTNUM 1 \l 15686 MS DIONNE: Thank you.
LISTNUM 1 \l 15687 In your Supplementary Brief, page 9, you state that:
"Few stations in Sudbury broadcast current music suited to the new Easy listening format."
LISTNUM 1 \l 15688 You go on to say that you:
"...see this opportunity to fill this void by providing a broader range of current and new music in Sudbury than is offered by either of your stations in Newmarket and Ottawa." (As read)
LISTNUM 1 \l 15689 Could you describe any other differences in terms of music between your Newmarket and Ottawa Stations and your proposed Sudbury Station.
LISTNUM 1 \l 15690 MR. BILL EVANOV: The main difference would be Canadian musicians are artists that are very local to the Sudbury area because, as I mentioned before, Sudbury would have its own music director who would be very specific in terms of some of the rotation in terms of playing to perhaps a little bit of an older demo and in terms of putting music into the system that would be very local. That is perhaps the main difference.
LISTNUM 1 \l 15691 MS LAURIGNANO: That coupled with the commitment to the new and emerging artists. Whereas we haven't really kept track of that in the other markets up until now, the commitment is there that we would meet the minimum requirements for the new and emerging artists for that market as a condition of licence or as a promise that we make here today.
LISTNUM 1 \l 15692 MS DIONNE: All right.
LISTNUM 1 \l 15693 I have some questions regarding your Catalogue of Canadian Instrumental Music initiatives.
LISTNUM 1 \l 15694 Would there be an interactive components such as an ability to download copies of the instrumental music listed, or would the site's format be a basic catalogue style listing of titles, composers and contact information.
LISTNUM 1 \l 15695 MS LAURIGNANO: Totally interactive. Download, upload, post, hyperlinks, music sales, dialogue, artist contact, management contact, appearance schedules, performance.
LISTNUM 1 \l 15696 MS DIONNE: All right.
LISTNUM 1 \l 15697 MS LAURIGNANO: Really everything that would help an artist from where to get recorded, you know, hints and help about how to get a demo together, how to get in the programming department at the radio station, who the contacts are to, you know, advise to chats once in awhile to having actual online forum with artists, with programmers, with recording industry promoters, managers, that kind of thing. So very much interactive.
LISTNUM 1 \l 15698 MS DIONNE: All right.
LISTNUM 1 \l 15699 Would you explain to us why on top of the nine thousand and ‑‑ nine twenty thousand already approved to support this initiative through approval of your Ottawa application, why an additional about $91,000 per year is needed to get the initiative up and running?
LISTNUM 1 \l 15700 MS LAURIGNANO: Yes, I can explain that. The monies that are committed here would be earmarked specifically for the Sudbury and Northern Ontario region.
LISTNUM 1 \l 15701 MS DIONNE: Okay.
LISTNUM 1 \l 15702 MS LAURIGNANO: The monies would be directed towards adding for example to the database, that is by identifying artists, their selections, and in terms of marketing and making the catalogue a resource for artists, broadcasters and the public of Northern Ontario. So there would be a specific effort there.
LISTNUM 1 \l 15703 For example, one of the things that we will do is, as part of the music and film in motion there is a Northern Ontario Music Development Program that was launched in 2005 and whose purpose and scope is to further assist Northern Ontario music artists and businesses. The program provides assistance in all career stages for artists such as emerging, mid‑career and established and in the form of support.
LISTNUM 1 \l 15704 MS DIONNE: Yes.
LISTNUM 1 \l 15705 MS LAURIGNANO: So we would be dedicating part of that money through our third party to be really digging deeper in that specific area in terms of us going out to find them. Whereas the catalogue is a resource that we promote and available for them to find us, we also, where we can, go find them, you know, those basements and cottages that Bill talked about, being aware that if we can facilitate the traffic over the bridge then, you know, both parties will benefit.
LISTNUM 1 \l 15706 MS DIONNE: As you know, approval of the catalogue initiative as part of the Ottawa application was based in part on the evaluation of whether or not the overall benefit to the Canadian broadcasting system was commensurate with $920,000 earmarked to support this initiative.
LISTNUM 1 \l 15707 With the additional $91,000 proposed funding, the total commitment to this catalogue will total $1,011,000.
LISTNUM 1 \l 15708 Would you explain to us why you feel spending over $1 million to create the catalogue will provide a commensurate benefit to the Canadian broadcasting system?
LISTNUM 1 \l 15709 MS LAURIGNANO: Yes. It is a benefit because it is going to be something that is going to be in the public domain and it is going to be there forever and it is a resource that is, again, for the benefit of absolutely the broadcasting system, but it is also the broadcasting system providing something to the outside world. That is, as I mentioned, to the film industry, who may be looking for composers and artists; to orchestras and artists who may be wanting to put a band together who are looking for musicians; to programmers who we wish and we hope may want to add instrumental music to their formats or to their music selections but don't know where to go; to schools. Just the list goes on and on and on and on.
LISTNUM 1 \l 15710 So the benefit is for the system in the long run.
LISTNUM 1 \l 15711 Of course it is for the benefit of the artists, new and emerging artists, both in terms of helping them establish a career or start a career and in terms of getting that airplay that is so vital and important once it has been recorded that will hopefully put them into the next stage, which is to get them performance schedules and appearances and then sell records and get them airplay.
LISTNUM 1 \l 15712 MS DIONNE: I have two last questions.
LISTNUM 1 \l 15713 Under the new CCD initiative Eligibility Guidelines that came out in the December Commercial Radio Review, it is possible that this catalogue initiative may no longer qualify as an eligible CCD initiative, this is because it would not obviously result in the production of audio content.
LISTNUM 1 \l 15714 If deemed ineligible, would you be prepared to redirect the proposed annual funding to another eligible CCD initiative or reduce your overall amount over and above CCD contribution by the ineligible amount?
LISTNUM 1 \l 15715 MS LAURIGNANO: Right. We would definitely not reduce our commitment. We would redirect that amount.
LISTNUM 1 \l 15716 Also, you can expect us to keep fighting for it because we think is a very important initiative and it is also something that is an ongoing initiative with the CAEB, which is the Canadian Association for Ethnic Broadcasters, that we intend to put our comments forth for consideration. In some terms it may be evaluated or valued in the same sort of terms.
LISTNUM 1 \l 15717 In any case, the commitment will not be any less and we would be unhappy to redirect it, but definitely we will ‑‑
LISTNUM 1 \l 15718 MS DIONNE: This leads to my next question.
LISTNUM 1 \l 15719 How would the catalogue initiative, as it now stands, be impacted if, due to the reasons of possible CCD ineligibility or non‑approval of your Sudbury application, the $91,000 earmarked to support this initiative is no longer available?
LISTNUM 1 \l 15720 MS LAURIGNANO: In the overall scheme of things it would not be impacted, because what we anticipated would be delivered with our initial investment was to create this national resource and to create it with the amount of money and over the seven years. So that will not be impacted at all in any way whatsoever.
LISTNUM 1 \l 15721 As I mentioned, it would be additional funds, not just here, but that we would be looking for in other opportunities in the future and not just from broadcasters but even third parties and other sponsors or associates or strategic partners, because we all know the more you have the better you can do, that's all.
LISTNUM 1 \l 15722 But the overall impact and promise of that particular project would not be affected. This would be additional things and would be specific to the Northern Ontario region.
LISTNUM 1 \l 15723 But I must say also that with the granting of this licence there would be a benefit extended to the catalogue as is right now regardless of whether the commitment is acceptable or not, because it would be another station for us to promote on, to put a hyperlink on, to promote some of our other initiatives that go along with catalogue.
LISTNUM 1 \l 15724 MS DIONNE: These are my questions.
LISTNUM 1 \l 15725 Thank you, Madam Chair.
LISTNUM 1 \l 15726 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15727 Mr. Grossman, you now have your two minutes to summarize your application.
LISTNUM 1 \l 15728 MR. GROSSMAN: All right. We are going to have a combo team here.
LISTNUM 1 \l 15729 MR. BILL EVANOV: Madam Chair, Commissioners, we want to emphasize a few of the most significant points in our application for the Diamond in Sudbury.
LISTNUM 1 \l 15730 We promise a new format to serve the 45‑plus demo with music not heard in the market, and we offer an entirely new independent voice. Of all the applicants before you, we offer what we believe is the least amount of duplication with existing stations in terms of music.
LISTNUM 1 \l 15731 We will bring hundreds of Canadian artists to Sudbury radio and we have promised 40 percent Canadian content throughout our schedule.
LISTNUM 1 \l 15732 We will also bring to Sudbury instrumental music as a major part of our playlist. There is a real interest expressed by the people of Sudbury for the format we have proposed. A new easy listening with our particular mix of Instrumental, Pop Classics, Soft AC, melodic music with a touch of Category 3.
LISTNUM 1 \l 15733 Our two companies each bring specific strengths. We never hesitate to look for the opportunity to serve those who are left out by the Canadian radio industry. My company has a proven track record in establishing the new Easy Listening format and in surviving in the toughest and most competitive markets in Canada, big and small.
LISTNUM 1 \l 15734 MR. GROSSMAN: My company, Haliburton, has particular experience in servicing communities throughout Northern Ontario in operating vital news and information services throughout the region and attracting advertisers. The community spread through out this vast part of the province turned to our service for a vital link to the whole region.
LISTNUM 1 \l 15735 I want to remain independent and I am totally ‑‑ and I want to reassure you ‑‑ committed to Northern Ontario. This form of merger of our two companies, the Diamond, is a positive form of consolidation, independent companies who remain independent of each other but share the strengths that can be best applied to the benefits of an under served community.
LISTNUM 1 \l 15736 If you grant the Diamond, we will tell you with confidence that the Haliburton group of French language stations in Sudbury, Kapuskasing, Hearst, Timmins and the independent operator in Chapleau, these stations rely on a strong base in Sudbury. Licensing any other application and not the Diamond will severely harm the French cluster.
LISTNUM 1 \l 15737 Our proposal is distinct from the other applicants in that we aim to serve the oldest demo. We ask you to help us serve this growing older demo in the Sudbury community and the instrumental artists who would like to be given the opportunity to perform for the people of Sudbury.
LISTNUM 1 \l 15738 Please license the Diamond.
LISTNUM 1 \l 15739 THE CHAIRPERSON: Mr. Grossman, Mr. Evanov, and to your colleagues, thank you very much.
LISTNUM 1 \l 15740 Madam Secretary...?
LISTNUM 1 \l 15741 THE SECRETARY: We have now reached Phase II in which applicants appear in the same order to intervene on competing applications, if they wish.
LISTNUM 1 \l 15742 Joco communication, Newcap, Connelly Communications Corporation, Larche Communications and the Haliburton Broadcasting Group have indicated that they will not appear in Phase II.
LISTNUM 1 \l 15743 Therefore, I would ask William Wrightsell to intervene on the competing applications.
LISTNUM 1 \l 15744 THE SECRETARY: William Wrightsell just mentioned to us that they will not be appearing in Phase II.
LISTNUM 1 \l 15745 THE SECRETARY: We will now proceed to Phase III, in which other parties appear in the same order set out in the Agenda to present their intervention.
LISTNUM 1 \l 15746 Please note for the record that the intervenors Wabano Aboriginal Health Access Centre, Kassandra Cutting, and CIRPA listed in the Agenda have informed us that they will not be appearing at the hearing.
LISTNUM 1 \l 15747 I would now ask Music and Film in Motion to appear and present its intervention.
LISTNUM 1 \l 15748 THE CHAIRPERSON: I'm sorry, could you just please wait a second before you start.
LISTNUM 1 \l 15749 Thank you.
LISTNUM 1 \l 15750 THE SECRETARY: Please introduce yourself for the record and you have 10 minutes to make your presentation.
LISTNUM 1 \l 15751 MR. LANDRY: Thank you very much.
LISTNUM 1 \l 15752 Madam Chair, Members of the Commission, good day and thank you for granting our organization the opportunity to present our views in the call for applications to operate an English‑language FM commercial radio undertaking in Sudbury.
LISTNUM 1 \l 15753 My name is Dennis Landry and I am the Executive Director of Music and Film in Motion, Musique et film en mouvement, a nonprofit bilingual organization with a mandate to foster the development and promotion of the music and film industries in Northern Ontario.
LISTNUM 1 \l 15754 Music and Film in Motion is also the official Northern Ontario affiliate for FACTOR. We are a member of the FACTOR National Advisory Board and a member of a coalition of nine provincial and territorial music industry associations representing the regional interests of the music industry in Canada outside of Québec.
LISTNUM 1 \l 15755 We are very excited to be here to talk to go to our organization and how we believe that Newcap's application for a new commercial radio undertaking in Sudbury could positively impact on the music industry in Sudbury and Northern Ontario.
LISTNUM 1 \l 15756 We would like to deal with two aspects of the application today. Those would be championing local music and a proposed financial investment in our organization.
LISTNUM 1 \l 15757 First, I would like to touch on access to the airwaves for local talent and championing local music.
LISTNUM 1 \l 15758 The single hardest task that any independent music artist will undertake in building their long‑term career is building an audience that can sustain it over the long term. While technology is changing for the better and more support systems exist, to assist in this process commercial radio remains the undiscovered country for most independent music artists, one which can have a dramatically positive affect on their careers.
LISTNUM 1 \l 15759 Newcap has made commitments in its application that will help to address the lack of access as it currently exists in our market for local musical talent. These commitments include: championing local music innovation by broadcasting new songs and acts and acting as a platform for Sudbury's independent music sector and giving new unsigned bands airtime for interviews and demos.
LISTNUM 1 \l 15760 These commitments are refreshingly new among commercial radio undertakings in our community. Providing this access will be of benefit both to the music industry by providing it with in a significant outlet to develop and communicate with a potential audience, and to listeners by offering fresh and new content unavailable elsewhere.
LISTNUM 1 \l 15761 Second, I would like to touch on the proposed financial investment in MFM's programs and services.
LISTNUM 1 \l 15762 Our organization offers the music industry in our region a wide variety of programs and services that provide support, information, communication, training and education, and we also offer business and market development services.
LISTNUM 1 \l 15763 All of these programs stem from our mandate, which is geared specifically towards supporting, promoting, educating and training the development of musical talent in Northern Ontario.
LISTNUM 1 \l 15764 We have created a three‑pillar structure around which our programs and services have been developed. These include industry and development, which includes our industry database of resources, musicians, funding agencies, et cetera, that are there to support musical talent in Northern Ontario, get their products created and out to market; professional development and skills development activities; industry support; outreach advocacy and member services.
LISTNUM 1 \l 15765 We also offer a program in marketing Northern Ontario. This includes direct marketing and outreach activities at the provincial and national levels, as well as our annual printed resource guide and directory which again takes the information from our industry database and puts it in a more compact form that is then easily distributable among our local artists, as well as promotion of Northern Ontario talent.
LISTNUM 1 \l 15766 Finally, our last program is the Northern Ontario Music and Film Awards, which includes an awards ceremony and a proposed grassroots industry conference and talent showcase. The idea behind this program is clearly to shed the spotlight on artists in our community that many people simply don't know exist.
LISTNUM 1 \l 15767 At a fundamental level this investment would allow MFM to expand a number of these existing programs and services to respond to the growing needs of our membership and our industry. Over the years in strategic and long‑term planning our services and programs have grown to meet the needs of our industry but, like many nonprofit organizations, we have never been in a financial position to implement every service or program to its fullest scope. In truth, we must make do with what we have.
LISTNUM 1 \l 15768 As such, many of our programs and services were created with the capacity to be implemented in stages as funds became available, offering immediate support to our industry in those areas that were most demanding. We have been fortunate in the support that we have received to date and what we have been able to accomplish in six short years with those resources.
LISTNUM 1 \l 15769 The proposed investment could not happen at a better time for our organization. The initiatives that have been outlined in Newcap's proposal represent core programs and services, each with the capacity to expand and provide a wider base of support and development opportunities to our industry. All that is required to kick‑start this expansion is a financial investment.
LISTNUM 1 \l 15770 Newcap's proposed contribution, coupled with our current organizational capacity, means that MFM would not require an administrative charge against any dollars coming from the investment. We have a highly competent administrative infrastructure that is at the heart of our ability to do more with less, something that we have become increasingly skilled at.
LISTNUM 1 \l 15771 This means that the entire contribution will be directed back into the support, promotion, education and development of musical talent in Northern Ontario, and Sudbury specifically.
LISTNUM 1 \l 15772 As a nonprofit organization we spend an increasing amount of time working to find the financing required to enable our programs and services. This is nothing new. This is a battle waged by most nonprofit organizations. Every year we must begin anew the search for support from the public and private sectors allocating staff time to this function.
LISTNUM 1 \l 15773 Imagine, if you would, what an investment of this nature per year would mean to a small nonprofit organization. We have talked about expanding our programs and services, but we must also recognize what this means in terms of staff resources and expertise. Greater financial capacity equals more hands‑on staff time with clients, conducting outreach and providing the essential services and programs that assist us in fulfilling our mandate and, in turn, assist the industry in our region to reach its fullest potential.
LISTNUM 1 \l 15774 Newcap's proposed investment represents a domino effect in expanded programs and services, as well as refocused staff resources.
LISTNUM 1 \l 15775 Finally, I would like to touch upon the length of the commitment. We have been very fortunate in our relationship with all levels of government to date and have been able to access multi‑year funding which, as you can appreciate, means greater stability for our organization to carry out its activities.
LISTNUM 1 \l 15776 Our current agreements are over three years. This provides us with the opportunity to launch a program in year one, improve upon it in year two, and then gives us year three to find the financing required to maintain it beyond that timeframe.
LISTNUM 1 \l 15777 Double that and add a year, which equals seven years, the stability in services and programming that this investment would afford our organization and the music industry in Sudbury and Northern Ontario, cannot be underestimated. Public and private support can fluctuate, governments change and priorities shift. In a way, we are held hostage to these potential changes.
LISTNUM 1 \l 15778 I'm sure I'm not the only Executive Director of an arts organization in Ontario who anxiously awaited both the federal and Ontario provincial budgets announced last week. Support over seven years means better long‑term planning, stable accessible programs and services and increased opportunities for the music industry in the region.
LISTNUM 1 \l 15779 MFM is ready, willing and able to work with any and all radio undertakings in our region. Our goal is to create positive impacts and opportunities for the music industry in Northern Ontario. We are very excited and encouraged by the positive discourse that this process has created in our community. We would like to congratulate all of the applicants for the incredible effort and thought that each has put into their proposals.
LISTNUM 1 \l 15780 In conclusion, MFM believes that Newcap has created the best overall plan with respect to benefits to the music industry in Sudbury and Northern Ontario, having put forward a thoughtful and concise application in all respects and we are confident that granting them a new radio licence in Sudbury will have a positive effect on our industry and our community.
LISTNUM 1 \l 15781 Madam Chair, Members of the Commission, thank you for your time today.
LISTNUM 1 \l 15782 THE CHAIRPERSON: Thank you.
LISTNUM 1 \l 15783 Commissioner del Val...?
LISTNUM 1 \l 15784 COMMISSIONER del VAL: Thank you for your intervention.
LISTNUM 1 \l 15785 I just want to follow up on Vice Chair Arpin's questioning to the Newcap panel yesterday.
LISTNUM 1 \l 15786 This is along the lines: the funding directed to your organization, which I understand is a music and film in motion organization ‑‑
LISTNUM 1 \l 15787 MR. LANDRY: Yes.
LISTNUM 1 \l 15788 COMMISSIONER del VAL: ‑‑ and you have clarified in your intervention today that this means the entire contribution will be directed to support development of musical talent.
LISTNUM 1 \l 15789 MR. LANDRY: That's right.
LISTNUM 1 \l 15790 COMMISSIONER del VAL: So you have within your infrastructure itself the ability to track the funds that go to music separately from funds going elsewhere?
LISTNUM 1 \l 15791 MR. LANDRY: Yes, we do.
LISTNUM 1 \l 15792 In fact, most of our private sector support is directed to one or the other, so we have had to put in place very early on the capacities within our accounting systems to be able to track that. For example, FACTOR support through collective initiatives, the SOCAN Foundation and, on the film and television side, the CTV Script Development Fund.
LISTNUM 1 \l 15793 COMMISSIONER del VAL: Thank you. That's my only question. Thank you for your intervention.
LISTNUM 1 \l 15794 MR. LANDRY: Thank you.
LISTNUM 1 \l 15795 COMMISSIONER del VAL: Thank you, Madam Chair.
LISTNUM 1 \l 15796 THE CHAIRPERSON: Commissioner Cram...?
LISTNUM 1 \l 15797 COMMISSIONER CRAM: Thank you, Mr. Landry.
LISTNUM 1 \l 15798 You said at page 2 of your paper today, in the second paragraph, that:
"Newcap has made commitments ... that will help to address the lack of access ..."
LISTNUM 1 \l 15799 And at the bottom of that paragraph you are saying that they were committing to:
"... giving new unsigned bands airtime for interviews and demos."
LISTNUM 1 \l 15800 They have a station in Sudbury right now. Do they do that?
LISTNUM 1 \l 15801 MR. LANDRY: As far as I know local musical content isn't available on their existing station, however in discussions hat we have had they have always been very open to that, but that it must fit within the existing format.
LISTNUM 1 \l 15802 COMMISSIONER CRAM: Their format, yes.
LISTNUM 1 \l 15803 All right. Thank you.
LISTNUM 1 \l 15804 THE CHAIRPERSON: Mr. Landry, thank you very much for your participation. We don't have any other questions for you.
LISTNUM 1 \l 15805 Thank you.
LISTNUM 1 \l 15806 MR. LANDRY: Thank you.
LISTNUM 1 \l 15807 THE CHAIRPERSON: Madam Secretary.
LISTNUM 1 \l 15808 THE SECRETARY: The last appearing intervention will be presented by STAK Productions.
LISTNUM 1 \l 15809 I don't think they are in the room.
LISTNUM 1 \l 15810 This completes the list of appearing intervenors, therefore Phase III.
LISTNUM 1 \l 15811 THE SECRETARY: We will now proceed to Phase IV in which applicants can reply to all interventions submitted on their application. Applicants appear in reverse order.
LISTNUM 1 \l 15812 We will ask the Haliburton Broadcasting Group.
LISTNUM 1 \l 15813 THE SECRETARY: They just mentioned that they will not appear in Phase IV.
LISTNUM 1 \l 15814 Then I would ask Larche Communications.
LISTNUM 1 \l 15815 They will not appear in Phase IV.
LISTNUM 1 \l 15816 Then Connelly Communications, please come to the table.
REPLY / RÉPLIQUE
LISTNUM 1 \l 15817 MR. CONNELLY: It is one page.
‑‑‑ Laughter / Rires
LISTNUM 1 \l 15818 MR. CONNELLY: I just want to thank you for the opportunity to respond to interventions regarding our application. We consider all the letters of support that we have received as evidence to our excellence in not only programming but community support.
LISTNUM 1 \l 15819 Although CIRPA was not here today, they made several good points in their comments to all the applicants and we feel as though our application meets many of the requests and concerns that CIRPA has raised in their intervention.
LISTNUM 1 \l 15820 With respect to the low‑power Christian music station presently broadcasting, it is broadcasting again at 101.1 in the Sudbury area, which is the frequency that we proposed, and we are committed to helping them if we are granted the licence at the same frequency. We are going to pay for a new technical brief for them to relocate.
LISTNUM 1 \l 15821 I would also like to thank the individuals and organizations who wrote letters of support that were included in our original application to the Commission and, more specifically, some of the people who wrote letters during the intervention period, including the three levels of government we deal with in our present markets highlighted by Charlie Angus, our Federal MP. Charlie was a musician in his first career before joining Parliament and was a member of the Grievous Angels who, I can tell you, we played on both of our radio stations.
LISTNUM 1 \l 15822 We could not have asked for a better endorsement, though, than the one sent in by Canadian Music Hall of Famer Tom Cochrane, who wrote:
"I can assure you that the entire city will quickly embrace the station as though it were their own." (As read)
LISTNUM 1 \l 15823 Those words sum up our intentions for the Sudbury market if we are successful in our application.
LISTNUM 1 \l 15824 So I would just once again like to thank the Commission and the CRTC staff for the opportunity to appear here this week.
LISTNUM 1 \l 15825 Thank you.
LISTNUM 1 \l 15826 THE CHAIRPERSON: Thank you very much, Mr. Connelly.
LISTNUM 1 \l 15827 Madam Secretary...?
LISTNUM 1 \l 15828 THE SECRETARY: Newcap just advised me that they will not be appearing in Phase IV.
LISTNUM 1 \l 15829 I would now ask William Wrightsell to come to the presentation table.
REPLY / RÉPLIQUE
LISTNUM 1 \l 15830 MR. WRIGHTSELL: I have one page as well. I will try to be brief.
LISTNUM 1 \l 15831 I just wanted to touch on the sports comment that was made yesterday. We reviewed paragraph 183 of the new 2006 Commercial Radio Policy and note that the reference to local programming contains inclusions for spoken word, sports being included in that programming.
LISTNUM 1 \l 15832 Although local news coverage is a cornerstone to our application, we will, on occasion, offer sports information during our spoken word programming, but sports minutes will be additional so that will leave our news content number, which is 493 minutes, intact, just so you know.
LISTNUM 1 \l 15833 MR. WRIGHTSELL: I would like to thank all the positive intervenors as well on our behalf, the Sudbury business community. We had 200 signatures from the public and numerous letters of support from council and we thank all of you for the hearing.
LISTNUM 1 \l 15834 Thank you Madam Chair, Co‑Chair, Commissioners and staff, for your diligence in the questioning and it is a privilege to have appeared before you.
LISTNUM 1 \l 15835 Thank you.
LISTNUM 1 \l 15836 THE CHAIRPERSON: Thank you, Mr. Wrightsell.
LISTNUM 1 \l 15837 Madam Secretary...?
LISTNUM 1 \l 15838 THE SECRETARY: I would ask Joco Communications to come to the presentation table, please.
REPLY / RÉPLIQUE
LISTNUM 1 \l 15839 MR. CORMIER: I have no script or anything, but I want to take this opportunity to thank all my supporters. We had some really good support letters and you guys had a chance to read them.
LISTNUM 1 \l 15840 I also want to thank my wife that joined me. It was a good experience. It was great. We have had a good time here, so thanks a lot and I'm sure the CRTC will make the right choice here.
LISTNUM 1 \l 15841 Madam Chair, Vice Chair and the rest, thanks a lot.
LISTNUM 1 \l 15842 THE CHAIRPERSON: Thank you, Mr. Cormier.
LISTNUM 1 \l 15843 Madam Secretary...?
LISTNUM 1 \l 15844 THE SECRETARY: This completes the consideration of Items 13 to 18 on the Agenda.
LISTNUM 1 \l 15845 THE CHAIRPERSON: Thank you very much.
LISTNUM 1 \l 15846 We will now break for lunch and resume at 1:30.
LISTNUM 1 \l 15847 Thank you.
‑‑‑ Upon recessing at 1205 / Suspension à 1205
‑‑‑ Upon resuming at 1330 / Reprise à 1330
LISTNUM 1 \l 15848 THE CHAIRPERSON: Order, please.
LISTNUM 1 \l 15849 Madam Secretary...?
LISTNUM 1 \l 15850 THE SECRETARY: For the record, I would like to mention that Larche Communications and Haliburton Broadcasting Group has filed their breakdown of spoken word and it will be available in the examination room.
LISTNUM 1 \l 15851 We will now proceed with Item 19 on the Agenda, which is an application by The Canadian Documentary Channel Limited Partnership Application on behalf of the partners of The Canadian Documentary Channel limited Partnership ‑‑ collectively the applicant ‑‑ for authority to effect a change to the effective control of the national English‑language Category 1 specialty programming undertaking known as The Canadian Documentary Channel, and for a new licence to continue its operation.
LISTNUM 1 \l 15852 Appearing for the applicant is Mr. Gary Maavara, who will introduce his colleagues. You will then have 20 minutes to make your presentation.
LISTNUM 1 \l 15853 Thank you.
PRESENTATION / PRÉSENTATION
LISTNUM 1 \l 15854 MR. MAAVARA: Thank you.
LISTNUM 1 \l 15855 Good afternoon, Madam Chair, Commissioners, CRTC staff, legal counsel. My name is Gary Maavara, I am Vice President and General Counsel of Corus Entertainment Inc., the managing majority partner of the Canadian Documentary Channel Limited Partnership.
LISTNUM 1 \l 15856 Before we begin our presentation, I will briefly introduce the Members of the Panel.
LISTNUM 1 \l 15857 On my left if Richard Stursberg, Executive Vice President of CBC English Television.
LISTNUM 1 \l 15858 Beside Richard is Kirstine Layfield, Executive Director, Network Programming at the CBC.
LISTNUM 1 \l 15859 To her left is Mark Starowicz, Executive Director of Documentary Programming for CBC Television.
LISTNUM 1 \l 15860 Next to him is Rob Scarth, CBC's Director of Regulatory Affairs.
LISTNUM 1 \l 15861 On my right is Michael Harris, Vice President and General Manager of The Documentary Channel.
LISTNUM 1 \l 15862 The application before you to transfer Corus's ownership interest in The Documentary Channel to CBC is a straightforward one in our view. It is a plan that will breathe new life into this channel and provide it with the opportunity to succeed.
LISTNUM 1 \l 15863 The members of the partnership are proud of the accomplishments of The Documentary Channel. There are not many Category 1 specialty channels that have broadcast so many new and compelling Canadian and international programs that have won so many awards and have garnered so much audience acclaim.
LISTNUM 1 \l 15864 That said, the channel has lost money since its launch and the present debt, which Corus has been funding, exceeds $16 million. The Documentary Channel is simply not viable with this outstanding debt. We believe that it does have the ability to generate modest earnings, but not enough to ever pay back this debt.
LISTNUM 1 \l 15865 The channel also does not fit within the Corus programming strategy, which mainly targets children and women.
LISTNUM 1 \l 15866 Programming is produced and acquired for use on many channels and new platforms. Corus has often talked about the need for large entities to compete for, acquire and produce copyright works. This reality is being played out around the world and, of course, in Canada.
LISTNUM 1 \l 15867 Great programming requires scale, regardless of the format. The Documentary Channel therefore requires a financial and operating model that removes the debt, establishes this scale and provides an ownership fit where programming can be used on other platforms.
LISTNUM 1 \l 15868 The CBC was the only logical acquirer that met those needs. The CBC is the only other general partner in the partnership. It is the only other broadcaster in the partnership. It is the only partner with the scale to take on this role. The CBC has the broadcasting presence, the programming skill and the scale to make this plan a success.
LISTNUM 1 \l 15869 For its part, Corus will absorb the debt, which will allow the channel to move forward.
LISTNUM 1 \l 15870 Richard.
LISTNUM 1 \l 15871 MR. STURSBERG: Thank you, Gary.
LISTNUM 1 \l 15872 The CBC is prepared to acquire Corus' interest in the channel and adopt an operating strategy that will keep it going. We applaud Corus for proposing a solution whereby they absorb the debt accumulated by the channel in order to provide the rest of the partnership with an opportunity to succeed.
LISTNUM 1 \l 15873 We are confident that we can make this work. Documentary programming is a genre CBC strongly supports across all of its platforms, both in television and in radio. The Documentary Channel is a good fit within CBC's family of services and the cross‑platform support CBC can bring to bear can help the channel and bring it to a financial breakeven point and ultimately to profitability.
LISTNUM 1 \l 15874 The channel plays a unique role in the system, providing a dedicated platform for documentary programming and an important window for Canadian documentary film‑makers.
LISTNUM 1 \l 15875 The submissions from the producer associations in this proceeding are testament to how much importance producers attach to the channel. We share that view. We believe the channel is important, too, and CBC is prepared to shoulder the responsibility to keep the service going.
LISTNUM 1 \l 15876 CBC's commitment to the genre, its position as the other general partner, and its long tradition of excellence in documentary programming, makes The Documentary Channel a natural fit for the CBC. CBC commissions and produces a significant amount of documentary programming on CBC television and on Newsworld.
LISTNUM 1 \l 15877 There are dedicated windows on both services for documentary programming, "Doc Zone" on CBC television and "The Lens" on CBC Newsworld to name but two.
LISTNUM 1 \l 15878 The documentaries that CBC supports, both its own and those commissioned from independent producers, garner a significant number of national and international awards.
LISTNUM 1 \l 15879 Approval of this transaction is clearly in the public interest. The Documentary Channel will remain open for business, continuing to enlighten, inform and entertain its small but loyal audience, and here will continue to be a dedicated outlet for the creative work of Canada's documentary producers and film‑makers.
LISTNUM 1 \l 15880 The Documentary Channel will also add to the strength of the CBC and contribute to its relevance to Canadians and its ability to thrive in a highly fragmented television environment. With this fresh start, we are convinced that The Documentary Channel can survive and prosper.
LISTNUM 1 \l 15881 In this proceeding some parties have raised concerns with this application, notably the National Film Board of Canada, the Documentary Organization of Canada, the CFTPA, the APFTQ and they Observatoire du documentaire.
LISTNUM 1 \l 15882 We are pleased to report that the National Film Board has informed us and the CRTC that it has withdrawn its interventions in this proceeding and it has signed the Special Resolution of the Partners Approving this transaction. We look forward to a constructive and productive working relationship with the National Film Board in this partnership.
LISTNUM 1 \l 15883 Producers acknowledge the important role that CBC plays in support of documentary programming, but they are concerned that too many of those eggs may be concentrated in one basket.
LISTNUM 1 \l 15884 We think the public record is pretty clear with respect to CBC's intentions. Approval of this application will keep the channel open for business. The channel will operate according to its existing conditions of licence. CBC remains committed to the documentary genre across all of its services and will maintain its level of support for independent documentary programming.
LISTNUM 1 \l 15885 CBC will respect and support the distinct nature of this service.
LISTNUM 1 \l 15886 Finally, CBC will license programming for The Documentary Channel from independent producers with separate licence fees.
LISTNUM 1 \l 15887 In closing, there has been a significant amount of interest in this application. The Documentary Channel is a unique service and it has become an important outlet for Canadian documentary producers. In some respects, they regard it as their channel.
LISTNUM 1 \l 15888 We are proud of that, because it means The Documentary Channel has done a good job. With this application, we are simply looking for the opportunity to continue to do that job and make The Documentary Channel even better.
LISTNUM 1 \l 15889 Thank you for your attention. Those are our opening comments and we would be pleased to respond to any questions you have.
LISTNUM 1 \l 15890 THE CHAIRPERSON: Thank you, Mr. Stursberg, Mr. Maavara.
LISTNUM 1 \l 15891 Vice Chairman Arpin...?
LISTNUM 1 \l 15892 COMMISSIONER ARPIN: Thank you, Madam Chair.
LISTNUM 1 \l 15893 Obviously I think your oral presentation probably answers all my questions but that being said, I apologize if there is some redundance. Obviously they were prepared before I had access to your oral presentation.
LISTNUM 1 \l 15894 But allow me to say that this application would not have had to reach the status of an appearing item if there had been no intervenor, so in order to set the stage for your presentation I will start with some questions that are based initially on the CRTC Decision 2455, since some of the intervenors are raising issues that are driven from the existing licence.
LISTNUM 1 \l 15895 So I will go through some of the statements that are in the decision to make sure that the CBC has a good understanding of what the decision was saying and is pursuing in the same direction for which the service has been licensed initially.
LISTNUM 1 \l 15896 Obviously you just said that you did agree with the nature of the service, so there surely is no need to go over the nature of the service, but there were some statements made regarding various issues like contributions to diversity, Canadian content, Canadian programming and expenditures, and I want to review some of them to record your agreement or any comments that you want to make.
LISTNUM 1 \l 15897 Regarding Canadian content, the licence was saying that for the first six years the Canadian content requirement will be 66 percent, and for the seventh year it will be 75 percent.
LISTNUM 1 \l 15898 I understand that you just currently are in your sixth year of operations so that you are still on the commitment of 66 percent Canadian content, but are you still planning to do 75 percent Canadian content next year?
LISTNUM 1 \l 15899 MR. STURSBERG: Yes, we are.
LISTNUM 1 \l 15900 COMMISSIONER ARPIN: Further, that there was a commitment to broadcast a minimum of 511 hours original Canadian programming over the licence term. The original programming will be a mix of new programs from CBC and NFB and commissioned programming from independent producers.
LISTNUM 1 \l 15901 Are you still on line to meet that requirement?
LISTNUM 1 \l 15902 MR. HARRIS: Yes, we are.
LISTNUM 1 \l 15903 COMMISSIONER ARPIN: Yes, you are.
LISTNUM 1 \l 15904 Will you do better than 511 hours or is that still the target?
LISTNUM 1 \l 15905 MR. STURSBERG: I think in general terms our intention is to meet all the conditions of licence. If we can do better we will be pleased, but at the very least that we will meet all the conditions of licence.
LISTNUM 1 \l 15906 COMMISSIONER ARPIN: Some were not necessarily conditions of licence, some were only commitments, particularly regarding the independent production where there was a commitment to spend at least 50 percent of the annual acquisition budget on programs from independent producers. That was to represent almost 200 hours per year of such material.
LISTNUM 1 \l 15907 Are you still committed to that level of acquisition from independent producers?
LISTNUM 1 \l 15908 MR. STURSBERG: Yes, we are.
LISTNUM 1 \l 15909 COMMISSIONER ARPIN: Regarding interactivity, it is becoming more and more of interest.
LISTNUM 1 \l 15910 Does The Documentary Channel have a dedicated website currently?
LISTNUM 1 \l 15911 MR. MAAVARA: Yes, it does.
LISTNUM 1 \l 15912 COMMISSIONER ARPIN: It does?
LISTNUM 1 \l 15913 MR. MAAVARA: It's quite a compelling site.
LISTNUM 1 \l 15914 COMMISSIONER ARPIN: And the CBC is acquiring the website at the same time?
LISTNUM 1 \l 15915 MR. MAAVARA: Yes.
LISTNUM 1 \l 15916 COMMISSIONER ARPIN: So it will become an integral part of the CBC internet proposal?
LISTNUM 1 \l 15917 MR. MAAVARA: Yes, it will.
LISTNUM 1 \l 15918 COMMISSIONER ARPIN: Are you using other platforms now, other than television, to carry some of the programming that The Documentary Channel is acquiring or producing?
LISTNUM 1 \l 15919 MR. MAAVARA: Yes. Actually, we are quite thrilled with some of the activity we are doing in these new areas such as video‑on‑demand. We have had terrific success with The Documentary Channel branded VOD service.
LISTNUM 1 \l 15920 COMMISSIONER ARPIN: Now, there was also a commitment to donate, starting with the fourth year, a minimum of $100,000 in scholarships on a yearly basis and to increase that amount to $200,000 annually in the sixth year of operation.
LISTNUM 1 \l 15921 Have you started to donate those bursaries?
LISTNUM 1 \l 15922 MR. MAAVARA: We haven't started the program yet. We still hope to get to that, and of course I think Mr. Stursberg would say that they would remain keen on doing that.
LISTNUM 1 \l 15923 Of course part of the benefits would be incremental to that and they relate to a similar kind of venture.
LISTNUM 1 \l 15924 Of course the difficulty that we had was the service on an annual basis just didn't hit targets with respect to revenue and we kept getting deeper and deeper into the hole on the debt side. So we weren't able to move forward on that one.
LISTNUM 1 \l 15925 But with respect to all the conditions, we are fully in compliance and, for example, in the area of spending we actually have exceeded the conditions of licence.
LISTNUM 1 \l 15926 COMMISSIONER ARPIN: Mr. Stursberg, obviously it is a liability that you are acquiring because the community surely is expecting that those bursaries will eventually be given out. I notice that it is also part of your commitment regarding tangible benefits to allocate money for bursaries as well.
LISTNUM 1 \l 15927 Are they the same bursaries that we are talking about or are they different bursaries?
LISTNUM 1 \l 15928 MR. STURSBERG: No, they are different.
LISTNUM 1 \l 15929 I just would make a point. I think that's right that, in terms of the scholarship programs ‑‑ just a couple of little points.
LISTNUM 1 \l 15930 First, the commitment that was originally made by The Documentary Channel in 2000, as I understand it, was neither really a condition of licence nor an expectation of licence.
LISTNUM 1 \l 15931 COMMISSIONER ARPIN: No, no, exactly, but it is a commitment made by the applicant.
LISTNUM 1 \l 15932 MR. STURSBERG: Right. Subject to their actually being able to get the channel in some kind of shape. But, as you heard, they struggled with that and found themselves, you know, sort of falling $16 million into the hole.
LISTNUM 1 \l 15933 We hope that we are going to be able to take this channel to profitability. I would not make an undertaking to spend this money on bursaries until such time as we had gotten the channel to profitability.
LISTNUM 1 \l 15934 Now, we have said, however, that with respect to the benefits associated with the channel, there is a series of ‑‑ it's $100,000 benefit, and that one we would certainly respect.
LISTNUM 1 \l 15935 COMMISSIONER ARPIN: So somehow what you are telling us is that you wanted to ‑‑ that this commitment be waived from the engagement that The Documentary Channel took at the time of filing its application?
LISTNUM 1 \l 15936 MR. MAAVARA: No, there is nothing in the record that suggests that and I ‑‑ again, of course ‑‑
LISTNUM 1 \l 15937 COMMISSIONER ARPIN: But that's what I'm hearing today ‑‑
LISTNUM 1 \l 15938 MR. MAAVARA: Of course ‑‑
LISTNUM 1 \l 15939 COMMISSIONER ARPIN: ‑‑ obviously that Corus has not made the expense and Corus will be leaving the organization at the end of ‑‑ if ever the application is approved. So the commitment obviously has been taken by the limited partnership, but the general partner until today has not delivered on its commitment.
LISTNUM 1 \l 15940 There may be good reason that Mr. Maavara and Mr. Stursberg just explained, saying that obviously the business plan as filed at the time of the application has not been met, and at the end, as your oral presentation is saying, Corus has already ‑‑ will be assuming a $16 million loss if the Commission approves the acquisition by the CBC of the partnership, of the general partnership. They were going to increase their place in the partnership, but they also will become the general partner without having the liability to give $100,000 a year into scholarships.
LISTNUM 1 \l 15941 MR. STURSBERG: Well, as I say, our preference would be, first of all, to bring the channel into a healthy financial state and then, as you point out, the channel has not met, you know, what it had hoped to do, which was to put up the scholarships. It has not been able to do that because of its financial situation. So we take the view that the first thing is to get into good financial shape.
LISTNUM 1 \l 15942 But we recognize that, you know, the channel has interesting opportunities to be able to do things with young film‑makers and that is precisely why what we did was to try to direct the benefits to that question. So the benefits are in fact precisely for that sort of work.
LISTNUM 1 \l 15943 COMMISSIONER ARPIN: But the benefits are for the future.
LISTNUM 1 \l 15944 MR. STURSBERG: That's right. We agree with you, yes.
LISTNUM 1 \l 15945 COMMISSIONER ARPIN: All right.
LISTNUM 1 \l 15946 Now my questions are really based on the interventions that we have received. I will try to phrase them in a way that they are expressed generally so that we are not necessarily identifying specific intervenors. Obviously I am interested in having the CBC's view on the issues that have been raised.
LISTNUM 1 \l 15947 The first one that I could say I have been able to identify is that with the acquisition of the controlling interest in The Documentary Channel CBC will be the dominant player in documentary in Canada, holding an almost monopoly‑like situation with fewer opportunities for independent producers. In fact, the concern takes into consideration the role already played by the CBC in Newsworld and Country Canada which are also broadcasting documentaries. There is there a fear that the over‑the‑air CBC television could totally vacate the documentary genre by scheduling documentaries only on its specialty services.
LISTNUM 1 \l 15948 I know that in your introductory remarks you were referring to some documentary windows that are on over‑the‑air television on the CBC network ‑‑
LISTNUM 1 \l 15949 MR. STURSBERG: Yes.
LISTNUM 1 \l 15950 COMMISSIONER ARPIN: ‑‑ but obviously similar arguments were made when you applied for Newsworld. There were intervenors saying that there will be no more news on CBC. This time the question is about documentaries.
LISTNUM 1 \l 15951 MR. STURSBERG: Well, let me give you the same answer then.
LISTNUM 1 \l 15952 If we had wanted to take documentaries off the main channel, we could have done that a long time ago. We have a documentary strand on Newsworld and we could have washed our hands of documentaries on the main channel. To the contrary, documentaries have remained on the main channel, they will continue to remain on the main channel.
LISTNUM 1 \l 15953 One of the things that we moved to do just a little while back was in fact to strengthen our documentary position within the main channel by creating a group under Mark Starowitz that is responsible for documentaries, all of the documentaries on the main channel which didn't exist in the past, as part and parcel of our ongoing commitment to documentary‑making.
LISTNUM 1 \l 15954 I think it is true to say that, you know, CBC will be the most important producer and distributor of documentaries in the country, but the fact is we already are. One of the things I would say, which I think is an important aspect of this, is that what we will be able to do, given the level of our commitment to documentaries, is actually to be able to promote to The Documentary Channel in a way that is quite impossible or it is certainly very difficult for Corus to do as effectively. Precisely because we have documentaries on the main channel and because we have Newsworld, documentaries on Newsworld, we can use both of those platforms to promote to The Documentary Channel itself and strengthen that channel as a vehicle.
LISTNUM 1 \l 15955 We have said, I think it is fair to say fairly clearly, to all the documentary film‑makers that we understand their concerns that what they don't want to see happen is that somehow or another The Documentary Channel would become a place where we would simply put on in repeats things that we had on the main channel or on Newsworld and that somehow we would diminish the status of The Documentary Channel.
LISTNUM 1 \l 15956 But of course the truth is, we bought The Documentary Channel not because we wanted to get to fail, we bought The Documentary Channel because we wanted it to succeed. We want The Documentary Channel to be better. And we know that if The Documentary Channel has nothing on it except the things that are on Newsworld and the CBC right now, then there would be no compelling reason for people to come to it.
LISTNUM 1 \l 15957 So we have told all the documentary film‑makers, and in fact we have made written undertakings to them, and indeed to the Commission in our filings, that we absolutely intend to ensure that all of the money that is currently spent on The Documentary Channel in terms of independent productions that go onto it will continue to be spent that way.
LISTNUM 1 \l 15958 One of the points we have made, and I think it would be helpful if the Commission could reinforce this point, is that it would be helpful to us if the envelope associated with The Documentary Channel inside the Canadian Television Fund were in fact transferred as part of the transaction, if you agree to it.
LISTNUM 1 \l 15959 We have said beyond that we are perfectly happy for that envelope to stand outside the CBC's main envelope if that gives comfort to the documentary film‑makers to know that that money could not be spent anywhere except with respect to The Documentary Channel itself.
LISTNUM 1 \l 15960 COMMISSIONER ARPIN: The other fear that I can see from the intervenors is that the CBC will, at the end of the day, be the only window for documentary production while with The Documentary Channel under the purview of Corus there was an ability to license documentaries through various windows. Now that The Documentary Channel will go under the aegis of the CBC, there will end up being only one window and maybe only one decision‑maker on which documentary genre will be produced or which producer will be selected.
LISTNUM 1 \l 15961 MR. MAAVARA: This is a question I think Corus can answer before CBC does.
LISTNUM 1 \l 15962 That perspective, I would submit, is a tad superficial in the sense that it ignores all of the other places that documentaries are being exhibited at this time on television, starting with the pay channels, including the Corus Movie Central and Encore channels, we do carry feature documentaries.
LISTNUM 1 \l 15963 But then there are channels such as History and literary a lot of the grist for their mill is documentary programming. CanWest for example has made a big commitment to documentaries as part of its programming identity and both funds and broadcasts documentaries on its broadcast channel as well as its specialty channel.
LISTNUM 1 \l 15964 So The Documentary Channel is an important venue for documentaries, as is the CBC, but when you really think about it there are probably four or five other places that Canadian independent production can place their programming.
LISTNUM 1 \l 15965 MR. STURSBERG: I think that is exactly right. Beyond the History Channel there is obviously channels like Discovery and Bravo that are serious commissioners of very important documentaries.
LISTNUM 1 \l 15966 COMMISSIONER ARPIN: Are you looking at having a centralized unit within the CBC to grant licence for documentaries, or will you keep a window at The Documentary Channel and another one at the CBC and a third one at Country Canada?
LISTNUM 1 \l 15967 How is it really working now and how will it be working in the future?
LISTNUM 1 \l 15968 MR. STURSBERG: Well, it's going to work in the future more or less the way it's working now. It is going to have its own staff that will be responsible for The Documentary Channel in the same way as we have, you know, our own staff who are responsible for Newsworld, our own staff who are responsible for Country Canada.
LISTNUM 1 \l 15969 What will happen is, there will be a head of The Documentary Channel. The head of The Documentary Channel will report to Kirstine as head of the Network Programs Office and that person, or persons rather, will be responsible for scheduling and managing the channel, for acquiring product on the channel and for commissioning independent documentaries from the independent film‑makers.
LISTNUM 1 \l 15970 So within the CBC it will operate very similarly to the way it has been operating in the past.
LISTNUM 1 \l 15971 COMMISSIONER ARPIN: Now there are some concerns that ‑‑ and I will seek both Corus and CBC to comment on an allegation made by some intervenors that the cash price base paid by CBC is under market value, since Corus benefited from the from the renewal negotiation of its affiliation agreement for Kingston and Peterborough.
LISTNUM 1 \l 15972 Could you please comment on that?
LISTNUM 1 \l 15973 MR. MAAVARA: The question of the price for the channel is an interesting one. It is more of an academic one than a practical one.
LISTNUM 1 \l 15974 COMMISSIONER ARPIN: Because there is also the fact that some others or the same are also raising that the real price is $16.3 million rather than ‑‑
LISTNUM 1 \l 15975 MR. MAAVARA: Well, that's an easy argument. That as a matter of law and policy is just simply incorrect as we stated in our reply to interventions.
LISTNUM 1 \l 15976 The purpose of ‑‑ and this goes to the question of the significant benefits, the benefits have always been applied to in the context of the non‑competitive nature of licence transfers in Canada and the benefit was effectively calculated on the basis of the benefit to the vendor and the point of that exercise is to disincent the trafficking of licences and also to provide "a public benefit" to a licence transfer in the context of a non‑competitive process.
LISTNUM 1 \l 15977 There are several citations that we make in the brief where the Commission has looked at this and where the vendor is being relieved of the debt then the benefit test applies to the whole amount. This is kind of an anomalous situation, in that we are in fact taking and keeping the debt and we have already written it off.
LISTNUM 1 \l 15978 So our submission is that as a matter of law and policy is that that point of view is just plain wrong.
LISTNUM 1 \l 15979 But then, to get to the first part of your question which was what is the proper market value of this, well, you know, it is really very difficult. The context that we were looking at this started with both the legal relationship that we have with the CBC and the other partners as well as the non‑legal relationship.
LISTNUM 1 \l 15980 Under the partnership agreement, were we to find a third‑party purchaser ‑‑ and, you know, I'm not shy about admitting that we have had some people come to us and say "Well, we would have paid you more than that", but the point of the exercise was, under the partnership agreement if we had a third‑party offer then the CBC and the others would have a right to match that offer.
LISTNUM 1 \l 15981 We looked at that and we said ‑‑ and we understood the numbers looking out for the next seven years and we basically said to ourselves, "If we take the debt away from the service, then this service can be a breakeven or slightly better service." And we said "If the cost of the service is going to be anything more than effectively ‑‑ well $1 million is not nominal but it's not a huge amount, if you get into a number that is any higher than that then effectively what you are doing is you are establishing the debt again and you are saying that the public broadcaster is going to have to find a way to finance this.
LISTNUM 1 \l 15982 As we said in our reply to the interventions, that is not a discussion really with the CRTC, it is really to the funders.
LISTNUM 1 \l 15983 That said, the owners and directors and management of Corus felt that "We are going to write this off anyway. We have a relationship with the CBC and they have the ability to make this a terrific channel and we are very proud of what we have accomplished to date, the problem is we just haven't been able to sell very much advertising associated with it and they can make a go of it and it's in the public interest for them to have it, they can run it on a small profit basis and, as a result, it is not going to be a tax on the public purse, if you want to put it that way, and as such this agreement is greatly in the public interest."
LISTNUM 1 \l 15984 As to whether the benefits should be higher, if the benefits, as I mentioned earlier, with the higher price for the purchase, if you called them benefits instead, they would still go to the situation where you would have to ask yourself: Is the Government of Canada prepared to give the CBC more money to run this channel? Corus kind of answered that question by saying "We will accept $1 million and that's fine by us."
LISTNUM 1 \l 15985 COMMISSIONER ARPIN: Now, regarding the renewal of the Kingston and Peterborough affiliation agreements, some have argued that it might have been a sweeter deal ‑‑ I'm not necessarily using their terms ‑‑ than the terms usually on which they CBC negotiates affiliation agreements.
LISTNUM 1 \l 15986 Do you have any comments to make?
LISTNUM 1 \l 15987 MR. STURSBERG: Yes, I do.
LISTNUM 1 \l 15988 The terms on which the affiliation agreements were extended are identical to the terms that they were on previously. In other words, nothing has changed. All we did was extend them over the next ‑‑ four years I think it is. They start in 2007.
LISTNUM 1 \l 15989 But the financial arrangements underpinning the extension of the agreements are identical to the financial arrangements that were in the previous agreements. So there has been no sweetening of the affiliation agreements.
LISTNUM 1 \l 15990 I think it is very important to see these things for what they are. These are two completely separate transactions. It turned out that they happened at the same general period of time because of when the affiliation agreements expired and when it was that we were having this conversation with Corus.
LISTNUM 1 \l 15991 There is no increase to the money in the affiliation agreements. If you are interested we would be happy to file with you in confidence the old agreements plus the new ones, we have no problem with that, and you will see they are identical.
LISTNUM 1 \l 15992 COMMISSIONER ARPIN: Well, we ‑‑
LISTNUM 1 \l 15993 MR. STURSBERG: So there is no sort of bump in money that somehow or another has alluded people which should be tacked on as part and parcel of the acquisition price.
LISTNUM 1 \l 15994 You know, the other thing I would just add to what Gary was saying is, when you have a channel that is losing this amount of money it is very difficult to calculate what its worth. Typically we calculate these things as multiples of EBITDA, but when you have negative margin then, you know, it's sort of tricky.
LISTNUM 1 \l 15995 People have said, as Gary was mentioning, that there has been some discussion that somehow the $16 million should be rolled into the transaction price. That would be true if we had assumed the $16 million liability. But we didn't, and we are enormously grateful to Corus that they have agreed to eat the $16 million loss.
LISTNUM 1 \l 15996 Indeed, I think that what Corus has done here is something that is very much in the public interest because I fear that if the channel had continued to go the way it was, hobbled with $16 million in debt, it would have been very difficult for the channel ever to have been viable on a going‑forward basis. So I think that what Corus has done is very much in the public interest and I think it's in the interest of the documentary community as a whole.
LISTNUM 1 \l 15997 COMMISSIONER ARPIN: Since you are volunteering to allow the Commission, on a confidential basis, to see the former and the new affiliation agreement, could we ask you to file them with the Commission and when do you think we could get them?
LISTNUM 1 \l 15998 MR. MAAVARA: We would be pleased to file them on a confidential basis.
LISTNUM 1 \l 15999 Just to add to Richard's comments with respect to the changes in the agreement, the only thing that we changed in the agreement were the clean‑up of some language that was in place.
LISTNUM 1 \l 16000 You have to understand that these stations have been affiliates of the CBC for 50 years. We are proud of the fact that we just had our 50th anniversary of those stations. As one can imagine, I think the last agreement was done 10 years ago so we cleaned up some of the language to reflect things such as satellite delivery of the signal and that sort of thing. But from a substantive and practical standpoint they are the same agreements.
LISTNUM 1 \l 16001